The supply and demand situation for the LED industry has affected LED prices. The amount of demand in the lighting market leads industry insiders to predict that by 2015 supply and demand will be roughly equal. Foreign investment firm Goldman Sachs in the most recent global LED industry report pointed out that due to lowered demand expectations from Japanese, Korea, North American and European LED manufacturers, MOVCD equipment volume increase for 2013 has been lowered. 2014 MOCVD equipment is predicted to increase to 307. Chinese manufacturers still under government subsidy are expected to increase the number of units to 125 in 2014.
Goldman Sachs said that although 2013 production capacity utilization is already higher than 2012, Asian manufacturers are in a critical situation with a utilization rate over 90% and reaching full capacity. Additionally, with Korean, Japanese, U.S., and European LED manufacturers lowering demands and chip manufactures cautiously expanding production capacity, Goldman Sachs has therefore lowered the 2013 and 2014 MOCVD equipment volume increase. After estimates were lowered, MOCVD increased equipment volume was adjusted to 213 and 307.
In regards to production expansion by Chinese manufacturers, Goldman Sachs says that the China MOCVD market has a lot of growth potential for 2014 due to an increase in general lighting demands and local government subsidies. Chinese manufacturers are already considering increasing production capacity to increase capital. Goldman Sachs predicts that MOCVD equipment will increase to 125 and according to statistics provided by the firm, Chinese MOCVD new equipment volume increase for 2013 and 2014 accounts for 33 percent and 41 percent of the total global number of new equipment increases. This shows that MOCVD manufacturers still have a high reliance on the Chinese market.
