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Sharp price drop of blue LED chips hit many LED packaging companies seriously

The price of blue LED chips has dropped too much compared to the price last year, making a great pressure on many LED chips manufacturers. The price of 4-inch wafer has fallen from US$ 22 in 1Q17 to around US$ 15 in 1Q18. As the cost is about US$ 15, the sharp decrease of price could lead to deficit for LED chip makers.
blue LED chips packaging market
It is estimated that as LED chip price had risen by around five to ten percent in 2017, many LED encapsulation companies might have booked too many chips for stocks, so they could make shipment for orders on time. Those overbooked shipments are now in stock so the demands from LED packaging firms reduced much in 2018. The trade war may also be a reason for the price drop, as international buyers might reduce their orderd to Chinese chip makers. However, red LED is still in big demand, so companies who have RGB LED chips items would be less influenced by the price drop.

According to a market survey about the price trend in the year 2018, the demand in the LED lighting market has been weak. For this reason, LED chip makers have cut down the share of lighting business and moved the production capacities to niche markets such as automotive LED lights market and smart LED lighting,etc.
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