San’an Opto and Epistar Combined Take More than 50% of China’s LED Chip Market Share

TrendForce: San’an Opto and Epistar Combined Take More than 50% of China’s LED Chip Market Share

LED chip market scale reached RMB 9 billion (US$1.45 billion) in China in 2013, a YoY of 16%, according to the latest “2014 Chinese LED Package Industry Market Report” by LEDinside, a research division of TrendForce. 

Spurred by lighting market growth momentum, LED chip market demand further increased resulting in expanded market size. However, continual price drops caused LED chip market revenue growth to lag behind market volume demands. Certain LED chip manufacturers in the market will fail to increase revenue and profit even after expanding production capacity. 

Fig. 1: LED Chip Market Size in China from 2012-2013

Source：LEDinside

Chinese LED chip market’s industrial concentration continues upward climb with San’an Opto and Epistar making up more than half the market

San’an Opto and Epistar’s combined LED chip market share in China is about 51%, according to data compiled by LEDinside. San’an Opto’s revenue share constitutes more than 40% of Chinese manufacturers’total revenue, while Epistar’s LED chip revenue is a staggering 80% of imported Taiwanese LED chips in China. 

Manufacturers continue to encounter difficulties in raising profitability, with many small to mid-sized manufacturers caving under financing pressure. Some small to mid-sized manufacturers have exited the market, due to difficulties in maintaining client relationships, and lack of technological breakthroughs. San’an Opto, a representative of large manufacturers, is currently actively expanding production capacity. Accompanying industry developments, Chinese LED chip market’s industrial concentration will continue to rise. 

LED chips are a principal component in LED packaging, and are playing an increasingly important role. Other technical innovations in auxiliary materials including lead frame (EMC/PCT lead frame), phosphor powder (remote phosphor) and adhesives have also significantly impacted LED package industry’s technological developments. In addition, market observations clearly indicate the emergence of Chinese package auxiliary material manufacturers, with rapidly expanding market shares. 

Fig. 3. 2013 Chinese chip market share analysis 

Source：LEDinside