LED supply chain companies are raising prices due to the high demand for LED chips, reports TrendForce.
In recent years, heightened industry competition has forced some companies to exit the LED chip market, explains TrendForce. Most of the suppliers who have remained in the market have reported consistent losses over an extended period, causing them to transition into more profitable sectors such as display technology. This shift resulted in reduced supply and correspondingly lower inventory levels.
In response to these changes, several LED companies opted to increase their prices. The primary increase has been seen in the price of LED chips specifically used for lighting applications. The most significant price increase was observed for low-power light chips with an area of 300 mil2 or less, which saw a price rise of about 3–5%. In certain cases, the price hike for chips of unique sizes reached up to 10%. Many companies see this price adjustment as a means to mitigate losses and actively reduce orders with low-gross margins.
TrendForce analysis underscores that the majority of the world’s LED chip suppliers are based in China, where the recent price rise for low-power light chips is viewed as a short-term strategy to bolster profitability.
Looking ahead, TrendForce predicts that by striking a balance between supply and demand, and increasing industry concentration, the LED industry will gradually return to a state of normalcy.
For more help with looking at supply chain options, contact Astute Electronics
