To build market share in China's LED lighting market, international firms have been expanding capacity. Philips' Lumileds has revealed plans to expand LED component capacity in its Malaysia plant in November. The firm expects daily production of high-power LEDs to increase from 2-3 million units to four million units. Japan-based LED firm Nichia is also set to expand its market share in China. The firm has invested around CNY10 billion (US$1.6 billion) to build new plants and install new equipment in 2012. Nichia hopes that by expanding capacity 20% in 2013, the firm can obtain a 30-40% market share in China.
LED firms noted that LED lighting in China is likely to commercialize quickly due to government support. International firms such as Philips Lumileds, Nichia, Osram and Cree have been eager to expand market share. However, if the total capacity of high-end LEDs expands in 2013, it would mean that Taiwan-based LED firms are likely to face increasing challenges.
Despite the fact that entry-level and mid-range LED products have been sweeping the market, international firms have yet to worry about oversupply as the firms focus on high-end products. Philips Lumileds noted that sales of LED lighting to corporations and hotels have been booming, while sales of street lamps and retrofit light bulbs are in second and third place respectively. This means applications for high-power LEDs have been expanding. Philips Lumileds currently has a 30% share in China's LED market, behind Cree. The firm recently obtained an order for 8,000 street lamps from Shenyang province.
Philips Lumileds' high-power LEDs have the technology to achieve luminous efficiency of 130-140lm/W and the company plans to increase to 150lm/W in 2013. Cree currently has a product efficiency of 160lm/W and aims to reach 180lm/W in the future. In 2012, Nichia achieved an efficiency of 150lm/W and targets 165lm/W in 2013.