In 2013 the Chinese LED packaging market has grown far quicker than the global average, reckons TrendForce's Green Energy Division LEDinside.
LED lighting is still the largest application sector, accounting for 42% of the 2013 Chinese LED packaging market, says the market research firm. Due to the rapid growth in demand for LED commercial lighting in the China market, Chinese manufacturers of LEDs for lighting applications (such as MLS Lighting, Honglitronic, and CF Lighting) have achieved continually improving performance, says LEDinside. High-quality indigenous chips have greatly improved the competitive position of China's lighting-use LED packaging industry, the firm adds, with indigenous chips capturing almost 80% of the Chinese market in 2013.
For the backlighting sector, LEDinside analyst Allen Yu said that, with the support of Chinese TV and mobile phone makers, mainland LED packaging firms gradually replacing those of Taiwan, Japan and Korea has become an irreversible trend in the market. In particular, in the TV backlighting field, Refond, DSBJ, AMTC, Shineon and other manufacturers have all attained fast-growing performance, and penetrated the supply chain of China's top six TV makers. Supplying products for brand manufacturers can not only significantly improve the quality control and management capability of the Chinese LED packaging industry but also help Chinese packaging firms to build strength for participating in global competition, notes LEDinside.
For emerging fields such as automotive lighting and flash LEDs, the monopoly of international manufacturers is expected to change. Chinese packaging firms are actively penetrating these emerging markets. In the case of lighting, with the backlighting and display markets being almost fully competitive, these emerging fields are expected to become the new battleground for Chinese packaging firms to compete.
In view of the global market, the main challenge for Chinese LED packaging firms to improve their market share in the future still comes from technology. In 2013, EMC (epoxy molding compound) lead-frame materials, flip-chip, chip-scale packaging (CSP) and other emerging technologies have appeared. China's Elec-Tech International (ETi) and Sanan Optoelectronics have developed flip-chip technology, and EMC lead-frame technology has also attracted much attention. Lightning Optoelectronic Technology, Smalite Optoelectronics, Honglitronic, Refond, APT and other manufacturers have adopted EMC packaging production lines. Although this is not sufficient to reshape the competitive landscape, the impact on existing industry development is still worth noting, says LEDinside. However, it will take some time to verify how the new materials and technologies will affect existing industry development over the next few years.
Allen Yu points out that the evolution of LED packaging technology always focuses on the continual decline of end-use costs. The use of new packaging materials, the formation of new packaging specifications, and the emergence of new packaging technologies should reduce the cost per lumen on the premise that quality is guaranteed. LEDinside expects that global LED lighting product shipments will grow by 68% in 2014, with the production value reaching $17.8bn. Given the situation that backlight market penetration is becoming saturated and other applications are still emerging, how the Chinese LED packaging industry seizes the opportunity of rapid development of the global lighting market will become an important factor to the outcome for manufacturers.
On 19 December, the LEDinside research team is hosting its 'LEDinside Chief Analyst Market Seminar' in the Hawaii Room on the seventh floor of the Hotel Marco Polo Shenzhen, China. The forum covers the global LED industry as well as trends in China's LED industry in 2014, analyzing the lighting, backlight and packaging industries.
