LED lighting market reversal 2014 chip market can be expected

Since the beginning of this year, China's customs data shows that the export growth of mainland LED lighting products is strong. Especially in the second half of the year, the monthly average is over 40%, and the speed increase is very obvious. Since 2014, the world has banned the sale of incandescent lamps below 60W. Due to the early distribution of channels, the demand for LED replacement light sources has been highlighted in the second half of 2013, which has led to the growth of the mainland export market. Under the combined effect of technological advancement, cost reduction, policy subsidies and promotion of large factories, the industry judged that the penetration rate of LED lighting in 2014 is expected to exceed expectations.

In LED lighting, the chip is an important part of the luminaire, which is the basis for achieving controllable lighting. With the gradual increase in market concentration and relatively stable prices (decreased technology), the industry has gradually resumed growth and the economy has improved.

At the same time, with the accelerated penetration of LED lighting, the demand for LED chips will increase by 30-40% in 2014. From the supply side, the major chip factories are more cautious in expanding production. It is expected that the effective capacity will increase by 20-30% in 2014. Therefore, industry supply and demand is expected to be better than 2013. We believe that the chip's profitability mainly depends on industry supply and demand, scale effect and product structure. Under the background of supply and demand, the scale effect of Sanan and other chip manufacturers has been continuously strengthened, and the product structure has been further optimized, and its profitability will continue to improve.