LED prices in 3Q15 expected to be stable

As prices for LED chips and LED packaging services dropped 10-17% in the first half of 2015, prices are expected to be stable in the third quarter due to peak demand, but may fall again in the fourth quarter and the first quarter of 2016 due to slow demand, according to Taiwan-based LED makers.

Prices in the first half of 2015 were affected due to a slowdown in the industry coupled with China makers unleashing new capacity. Makers competed for orders through lowered price quotes as a result, which also affected the profits for various LED makers. LED 2835 products saw an average of 10-17% price declines, higher than packaging pricing that saw around 10%, noted makers.

Heading into the third quarter of the year, these trends will balance due to a heat up in the market but are likely to slow down as of the fourth quarter. Going into 2016, makers aim to reduce packaging sizes and LEDs used on various applications to save on costs, most notably for 2835 products, to reduce the effects from the price drop.

For the LED backlighting market, growth in 2015 has been slower than previously expected because end market demand picked up much later and changes were made to China's LED subsidy policy. LEDs for direct-type TV applications have experienced the greatest price decline in the second quarter, with 3030, 2835, 3535 and 3228 packages falling to US$0.25-0.30/unit. LED package price for mid-range and low-end TVs has dropped by nearly 6% each quarter. 7020 packages, which are the mainstream for edge-type TV application, are priced around US$0.085-0.095/unit, according to a recent report from LEDinside.