Global LED package market is estimated to achieve US $14.6 billion in 2014, and grows at a CAGR of 3.2% during 2014-2018.
Relying on growing domestic demand, China has successfully overtaken Taiwan as the world’s largest LED chips maker. Chinese manufacturers have effectively brought down costs by means of standardization to reach economics of scale. Chinese manufacturers’ success in launching high C/P 0.2W 2835 LED chips has led to its Asian competitors to follow up, abandoning the tradition of 3030 LED. Global LED chip market trend tilted towards standard to mid-power LEDs as a result to the emergence of Chinese manufacturers.
Having received MOCVDs subsidies from local authorities, Chinese LED manufacturers are able to ship low cost LEDs. Each MOCVD costs nearly $1.0 million to $1.2 million, where 67%~ 80% or $0.8 million of the payment are subsidized. Hence, Chinese manufacturers have minimal financial burdens from equipment costs, which can be reflected from effective aggressive pricing. Major manufacturers were among the firms that benefited from China’s subsidy schemes last year.