China-based LED makers' production capacity expansion in the first half of 2014 has since resulted in oversupply, forcing them to reduce quotes to compete for orders in the fourth quarter. Taiwan-based competitors will follow suit in cutting prices, with quotes for backlighting products used in hand-held devices to drop by about 10%, according to industry sources.
A power supply maker and 23 others in the LED supply chain in China have formed an alliance to minimize production cost by increasing economies of scale, with ex-factory price for a T8 LED light tube lowered to CNY11 (US$1.8) initially and further to CNY9 currently, the sources indicated.
In comparison, Taiwan-based makers' ex-factory prices for a T8 LED light tube stand at US$3-4, the sources noted, adding price competition for LED lighting may continue until 2015.
In the China market currently, LED's penetration rates in the streetlamp, commercial lighting and office lighting segments stand at about 20%, 15% and below 10% respectively, the sources said. LED lighting demand in China in 2014 will grow 60% on year in volume but only 30% in sales value due to price drops, the sources indicated.
Source:
http://www.digitimes.com/news/a20141028PD202.html
