Further evidence of strong LED production growth in China for the next few years

LED lighting market projected to grow 12-fold by 2023

In a market analysis of last year, research market firm HIS forecast a boom in the LED industry in a report with title “Demand for Key Raw Material Set to Double as LED Market Booms”.

According to the firm, a substantial increase in LED shipments would drive up the request for precursor used in MOCVD to create the appropriate conditions for epitaxial growth of the thin film over the sapphire substrate from 32 tons to 69 tons in just four years.

As written in this blog a few days ago there are other signs that point to a substantial increase in Chinese LED production in the next few years.

Many analysts are questioning whether LED makers, mostly based in China and Taiwan, could sustain such a growth or if, in case of lower growth than expected, whether some Chinese makers may be forced out of business by excess of production capacity and lack of demand.

According to fresh news it now looks that Sanan, which is the largest Chinese LED firm and accounts for some 30% of the whole LED production for the country, seems to be increasing their manufacturing capacity.

In addition to this news, a new Digitimes report suggests that the Chinese Government may have set a new target for LED production to $164 billion for the year 2020, with the lion share of this amount (at about 70%) coming from lightning.

Backlight market in China also grew considerably from 2012 to 2013, with a 74% increase, and there is also hope that the growth will be sustained throughout 2014.

The factors behind this growth are more than one:

  • the rapid urbanization in China, with a forecast for 2020 that 60% of the population will live in urban areas which would drive upwards the demand for urban lighting;
  • the plans for a rapid increase in the country network of railroads and highways, with the high-speed railroads that are expected to create the backbone for the transport infrastructure of China in the 21st century and which would add up to the current expected market for LEDs in the next few years;
  • the trend in decrease in price and increase in efficiency for LEDs which are expected to grow in the future assuming that new technologies such as GaN on silicon wafers instead of sapphire substrates may keep up with the promises.

All the above factors combined together seem to indicate and be conducive to what pointed out to the conclusions highlighted by the market research quoted above.

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