LED Chip Makers Facing Price Pressure from Chinese Partners

Due to recent pollution crackdown by Chinese authorities, the steel industry in China has halt production and undergone consolidation, leading to a dramatic price surge in steel products. As a result, prices of LED chip and packages have also increased, further resulting in a price hike in LED end products.

Nowadays, not only Forest Lighting, a major Chinese LED package manufacturer, has increased the price of its products, the middle and upstream sectors of the LED supply chain have also followed suit. To counter ever-increasing costs, the downstream sector has no choice but to raise prices.

According to LEDinside, among the five listed Chinese LED companies, including Unilumin, Lian Tronics, Inventronics, Chang Fan, and Aoto, three of them have reported a profit growth last year. The LED market in China has experienced a shakeup, whether this will benefit large corporations or encourage companies to find new niche market should be carefully monitored. However, not all types of LED chip are becoming more expensive. Price hike is seen mainly among those who are highly demanded and those with good quality.