LED product prices decline

As one of the most important markets in the world, the impact of the United States on China's lighting industry. Affected by this, more than LED shares began to rise. 2014 is a crucial year for the development of China's LED, because we all have action, including several of the traditional giants, international giants, and even have never done before the LED companies have joined.

If the share price soared last year between 4~6 months because of the recovery of the LED market, then this time we expect the outbreak of the market, while the fuse is the United States to eliminate incandescent policy. According to the U.S. energy independence and Security Act enacted in 2007, the United States in three steps to eliminate incandescent:

The first step in 2012 out of 100 watt incandescent lamps to energy-saving 25%~30% lamps to replace;

The second step, to further eliminate the 2013 75 watt incandescent lamp;

The third step is since January 1, 2014, the elimination of 60 watts and 40 watt incandescent lamp.

"The next 3 years will be the outbreak of LED lighting, especially energy saving replacement will be a big market".

In fact, the multi point of view LED lighting is about to enter the outbreak of an important reason is that with the decline in prices, LED products already have the strength of competition with the traditional lighting products. January 19th, the reporter found in an e-commerce site search, 3 Watt LED bulb minimum price even more than $2, while the average price of the product in a few dollars to tens of dollars.

LED product prices decline

According to the reporter, LED product prices fell for three main reasons:

First, the key components - chip to achieve mass production, effectively reducing the cost;

Two is the continuous progress of technology, cost-effective products continue to appear;

Three is the competition is intense, the enterprise has generally used the "price change" strategy.

Public data shows, after the chip occupies LED lamps at least 1/3 of the cost, the decline in chip prices, packaging industry transfer to the river, to the downstream applications, the LED lighting products prices have declined. Chip prices are an important reason for the decline in domestic mass production. Before 2010, the chip mainly rely on foreign imports, higher prices. With the rapid progress of the chip localization, prices fell significantly.

According to the Institute statistics, as of November 2012, China's MOCVD equipment (LED chip production process of the key equipment) number of 909 units, these devices have been introduced between 2010 and 786 in. The introduction of a large number of devices makes the size of the enterprise highlights, monolithic chip prices can be reduced. In addition to the scale effect, technical progress on the LED industry chain in the middle and lower costs, but also to promote the role of new patents every year, emerging, new technologies continue to emerge, making the price of the product continues to decline.

In addition, it is a factor in the price war, from 2010 to date, the majority of enterprises have shown a downward trend in gross profit. In the Chinese market, not only the emerging LED manufacturers began to actively layout LED lighting market, traditional lighting manufacturers have the brand and also actively take advantage of the pipeline network and store a two pronged approach to expand LED lighting business. The government is trying through subsidies, to play a positive role to promote the development of LED industry, and resolve the problem of overcapacity from the collapse of the upstream equipment and excessive subsidies lead to enterprises, is expected to Chinese 2014 LED lighting products will be an increase of 86%.