LED lighting market penetration continues to rise, or ignite a new wave of price war
Release time:
2016-03-07
The penetration rate of LED lighting market continues to rise and price competition is becoming more intense. LED industry revealed that Philips, a leading international lighting factory, has set an ultra-low target of reducing the ex-factory price of LED bulbs to US $0.8 in 2016, a drop of more than 20%, which has greatly increased the pressure on upstream supply chain industry. However, the recent US dollar exchange rate has continued to strengthen, which is conducive to easing the pressure on upstream manufacturers to reduce prices, recently, it has been reported that mainland LED bulb assembly factories have called out that the ex-factory price of LED bulbs can reach the target of US $0.8 in advance in the first quarter, which may ignite a new wave of price war in the LED lighting terminal market.
The penetration rate of LED lighting market continues to rise and price competition is becoming more intense. LED industry revealed that Philips, a leading international lighting factory, has set an ultra-low target of reducing the ex-factory price of LED bulbs to US $0.8 in 2016, a drop of more than 20%, which has greatly increased the pressure on upstream supply chain industry. However, the recent US dollar exchange rate has continued to strengthen, which is conducive to easing the pressure on upstream manufacturers to reduce prices, recently, it has been reported that mainland LED bulb assembly factories have called out that the ex-factory price of LED bulbs can reach the target of US $0.8 in advance in the first quarter, which may ignite a new wave of price war in the LED lighting terminal market.
On the other hand, due to the continuous sharp decline in the price of LED bulbs, the quotation of upstream LED components is close to the cost line, and the revenue of the top 15 LED manufacturers has declined. It is reported that in the second half of 2015, the price of medium-power LED in the lighting field fell by 30-40%, and the price of high-power LED fell by 20-30%. In view of the weak price competition of LED components, many LED manufacturers' business has declined.
The price of LED components in the Chinese market has plummeted, causing many companies to withdraw from the LED market. It is reported that 4000 Chinese LED manufacturers withdrew from the LED market in 2015, and this "going out enterprise" closed-end sales forced other manufacturers to reduce the price of LED products. Manufacturers profit suffered a severe test, although the overall LED bulb shipments increased, but did not help manufacturers to improve operating conditions, so some competitors were forced to withdraw from the market. Some LED manufacturers pointed out that there is almost no difference between the price of LED bulbs and provincial light bulbs, and there is still pressure to reduce the price of LED bulbs in 2016, but the decline is expected to slow down throughout the year.
Even though the market competition continues to intensify, for the LED industry, the future development potential is still quite huge. Zion Research recently released a global LED lighting market report, predicting that the global LED lighting market will be as large as $42.5 billion in 2020, with a compound annual growth rate (CAGR) of 13% during 2015-2020. Among them, the building application LED lighting market will usher in rapid growth.
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