LED industry’s supply and demand is likely to reach equilibrium sooner than predicted as price falls ease in price falls in 2013 due to exodus of Chinese LED manufacturers, said David Chung, Genesis Photonics Inc. (GPI) chairman during the Sustainable Green Development Global Green Business Outlook 2014 conference held by the Ministry of Economic Affairs on December 17th, 2013. The LED industry could see a rebound after the 2014 Lunar New Year.
Chinese manufactures large production capacity lead to an oversupply problem in 2011, said Chung. The market originally estimated a turnaround by 2015, but with gradual growth of LED lighting demand in 2013, the turnaround might happen after Lunar New Year. Chung is optimistic about supply and demand balancing out by early 2014.
Over the last few years, the Chinese LED industry has been in depression, having been ravaged by oversupply issues triggered by government subsidies in 2011 that led to manufacturers soaring production capacity. Chung pointed out product prices are beginning to decline as many cross strait LED manufacturers back out of the market. High powered chip prices for example are already reduced 5 percent in 2013. The market’s long awaited LED lighting sector has finally seen signs of growth this year.
LED lighting is driving up growth for overall demand in 2013, said Chung. The LED industry could show clear signs of recovery after Lunar New Year displaying an S curve development trend. Chung believes that LED output value in 2013-2018 will have a compound annual growth rate (CAGR) of 30-40 percent.
