Expected LED chip supply or renewed tension next year


After three years of oversupply, we believe that the supply of LED chips in 2014 may regain tension, due to the continued growth in LED demand for general lighting, stable demand for display backlight modules, and the expansion of LED chip manufacturers. We expect LED chip demand to increase by 29% in 2014, but supply is only increasing by 17. We expect supply and demand to be sufficient to fall from 4 in 2012 and 15 in 2013 to 4. In 2014, we expect the average of LED chips. The year-on-year decline in sales will narrow from 30-40 in 2012 and 20 in 2013 to 10-15 in 2014.
The rapid decline in LED bulb prices will stimulate demand. We expect LEDs to account for 9 (in lumens) of general lighting demand in 2014, up from 3-5 in 2013. LED lighting is being widely used in commercial and outdoor lighting. For residential lighting, we believe that the continued decline in LED bulb prices will be an important catalyst for demand. We believe that the price drop, coupled with the environmental advantages of LEDs, will provide consumers with a more cost-effective option to switch to LED lighting.
Limited expansion and potential outsourcing will benefit chip makers. Our verification results show that LED chip makers may only expand production in 2014. 14. We believe that cautious expansion will bring stable prices and better profitability.

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