Strong demand for LED backlight in the market; upstream chips still in short supply

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Based on the industry research LEDinside’s analysis and statistics, in May this year, listed LED manufacturers in Taiwan have total revenue of 9.65 billion NTD (~USD300 million, at USD 1: NTD 32.235), a 6.8% growth compared with revenue of 9.033 billion NTD (~USD280 million, at USD 1: NTD 32.235) in April, and 85.5% in annual growth rate. The revenue for LED chip manufacturers in May amounted to 4.273 billion NTD (~USD133 million, at USD 1: NTD 32.235) , which increased 6% compared to that of April. The revenue for LED package manufacturers in May totaled 5.379 billion NTD (~USD167 million, at USD 1: NTD 32.235) , which increased 7.5% compared to that of April.

Compiled by LEDinside, LED index (LEDX) observes the industry through the performance of the LED industry market value. Currently, LED epitaxy index (Chip LEDX) has dropped to 3949 points, while the LED package index (Package LEDX) also came to 5050 points. Although the production value of Taiwan's LED manufacturers continue to set new high records, the LED index drops to nearly 20% in its high point, compared to that of early this year. Evident from the index, the investors are still concerned about the substantial expansion of LED industry and competition with South Korean manufacturers.

Taiwan's overall revenue of chip manufacturers observed in May summed up 4.272 billion NTD (~USD133 million, at USD 1: NTD 32.235), which rose 6% from April, and an annual rate of 94.4%. Demand for large-size backlight is still strong, and because some manufacturers set up MOCVD equipment in Q1, they began mass production in Q2. As a result, their revenues continued to set new records.

For downstream LED package manufacturers, the overall revenue for May is 5.378 billion NTD (~USD167 million, at USD 1: NTD 32.235) , with a monthly growth rate of 7.5% and annual growth rate of 79%. The current overall demand for LED is still optimistic with the large-size backlight orders remaining strong. However, as the upstream chip shortage problem remains unsolved, some chip makers cannot get enough support from chips, which affected partial shipment. Even for some small-size package manufacturers, the price of low- to mid-power LED chip rose by 10% to 20% in Q2. Yet, the standards of high-power LED keep upgrading, so on the contrary, price per lumen continues to decrease, creating disparity in the market prices. 

LEDX

Produced by LEDinside, LEDX is an indicator for tracing LED industry. Amid the increasing awareness of environmental protection, eco-friendly LED lights have been applied to infrastructures in many countries. LED products show a great market growth, while its applications continue to expand even greater. In view of this, there should be a positive trend in the long run for this industry. To approach the LED market trend closely, LEDinside releases LEDX to observe how LED industry is viewed in the market. To further analyze the change in industry structure, LEDX is divided into two indices, LED chip & package – LEDX, as a reference for market players.