According to LEDinside, in the upstream LED chip sector, China’s market size increased by 9% YOY to RMB 13.9 billion in 2016, and 76% of LED chips were made by domestic manufacturers. In addition, market share of the top ten companies increased to 77%. In the midstream packaging sector, market size has increased by 6% YOY to RMB 58.9 billion. The share of domestic products increased to 67%, and market share of the top ten companies increased to 43%.
LEDinside analyst Yu Bin said in terms of technology, Chinese LED manufactures are catching up with their Taiwanese rivals, and Chinese products have higher cost performance ratio. Currently, more Chinese companies are expanding production capacity than their Taiwanese rivals. Thus, Yu estimated that more and more products will be made by Chinese suppliers in the future.
In fact, both the upstream LED chip sector and the midstream packaging sector have seen flat growth. It is estimated that the LED packaging market would only grow at a CAGR of 6% from 2015 to 2020, which is slightly lower than previous years.
“Although the industry has clearly undergone slower growth, the share of Chinese manufactures in global LED packaging capacity has increased rapidly as well,’’ Yu added. Global giants including Philips Lighting and Samsung have increased production capacity in their Chinese OEM factories.
Due to higher costs, some Chinese LED companies have also shifted part of their production from Pearl River Delta to other regions. For instance, MLS has built factories in Jiangxi Province and Jiangsu Province. Moreover, the LED market in China has matured with leading companies taking up majority of the market share. Therefore, some small and medium-sized enterprises have transformed and moved to other industries.
------------------------------lead by ledinside