LED chip prices will drop 10%, foreign investment into the local enterprises

To help accelerate the development of LED industry, Chinese manufacturers are to increase product development and related activities of investment, average level of investment will account for approximately 5% of operating revenues.

Most suppliers are stepping up production to meet the growing overseas demand, manufacturers are expected to invest to increase production capacity. Guangdong is likely to issue large orders for the 1500km LED street light project, which covers Dongguan, Foshan, Guangzhou and Shantou.

Some R & D programs are designed to address several LED patent technologies. These solutions will allow manufacturers to develop new lighting concepts and enhance competition in the market.

For example, in 2008 the Chinese enterprises to apply for nearly 26000 patents, most of them belong to LED packaging technology and applications.

For diode based products and other light sources, improve energy efficiency and reduce costs will be the focus of R & D. Emphasis will also be placed on improving durability and product life above.

At present, the life expectancy of LED bulbs is usually about 10000 hours, but some design is higher than the average. At the same time, most CFL longer than 5000 hours. More than 8000 or even 10000 hours of products are also available.

Price depends on power, size, material and technology. Most of the raw materials are purchased from domestic companies, but some are purchased from overseas as needed. For example, ABS is usually imported from South korea. Several thermoplastic products produced in Taiwan can also be used.

LED product manufacturers usually buy diodes and chips, which are mainly from the United States or Taiwan. Other lighting solutions are usually purchased from well-known companies such as Cree, PHILPS, OSRAM and Nichia.

Most raw material costs are expected to remain stable in the coming months. As the main packaging technology patents will expire in the year, is expected to LED chip prices will decline by 5-10%. The expiration of the patent may reduce the license fee and keep prices stable over the next six months.

LED based products are expected to expand penetration in residential and non residential areas. As technology advances to reduce costs and prices, the market acceptance of these products will speed up.

LED landscape lights are the main export products

LED products are used in many major indoor and outdoor lighting applications, replacing fluorescent and incandescent lamps. In the garden and landscape light source, LED products in the production and overseas exports accounted for a large proportion.

Lighting and electrical exports in 2009 show that the market is changing to green technology. October 2009, shipments grew 11%, more than 3 billion, compared with the previous nine months, a significant improvement. 2009 1-9 months, total shipments fell 24%. CFL, LED bulbs and lamps used in conjunction with these sources, the strongest growth in the first 10 months of 2009.

For example, CFL shipments fell only 6% to 1 billion 700 million. CFL cheaper than the LED bulb 30-40%, more attractive in terms of price, most suppliers are expected in the second half of CFL shipments grew 10%.

Suppliers are expected in the first half of 2010, LED lighting products sales growth of at least 10%. Manufacturers may continue to consolidate their markets in Europe, North America and the Asia Pacific region.

However, there will be more companies to develop potential markets, such as Africa, these markets demand for low-end products, and fewer barriers to trade.

Foreign investment into China's LED production enterprises

China is consolidating its position as the world's leading producer of LED. In recent months, a number of leading international manufacturers have invested in the Pearl River, the Yangtze River and the Yangtze River Delta region, the Bohai rim economic zone and even the western region of China to build factories.

This year China will become the main battlefield of global LED manufacturing. Zheng Haowen, director of the national high-tech enterprise development LED Specialized Committee, said the total amount of foreign investment in the field is expected to exceed $8 billion 800 million, a substantial increase of about $1 billion 500 million in 2009. "

In order to encourage international enterprises to set up factories in mainland China, the local government has introduced policies to subsidize the cost of construction. For example, Nanhai District, Guangdong, Foshan set up a 1.46-2.93 billion financial support fund. The project was founded in October 2009 to support the region's semiconductor lighting industry. One result of this is that the United States in the South China Sea SemiLEDs investment of $350 million to build a new plant. The plant, called Asahi Au Optronics Co, will use SemiLEDs patented metal substrate vertical structure LED wafer and high power chip production. The first phase of the plan is fully operational in October 2010, the monthly production capacity of the 1x1mm LED chip is 20KK. Expected to be completed by the end of three, after the completion of the investment, the capacity of more than 380KK/ months.

Jiangsu, Yangzhou has a similar policy. The city government to come up with $3.51-3.66 billion to subsidize the purchase of MOCVD equipment. The fund will be in place by October 2011. Through this policy, Yangzhou will assume $1 million 500 thousand per equipment procurement. Depending on the device's specifications, the price of the MOCVD device is around $4 million 400 thousand.