LED Industry to Face Challenging Market in 2015


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Research and Markets has announced the addition of the "Global and Chinese LED Industry Report, 2014-2015" report to their offering.

After experiencing fall to the bottom and price slump in LED during 2012-2013, quite a few LED enterprises have been forced to go bankrupt or retreat from the industry. However, those that still struggled on the manufacturing front have reduced their capacity. Even worse, so many companies have aborted their capacity expansion plans, which is particularly true of the upstream sectors. Price reduction stimulates the market and capacity cuts stabilizes the price. Therefore, the LED industry improved greatly in the first half of 2014, which soon came to an end. The market rise propelled enterprises to operate in full capacity, and even the enterprises that had been closed down resumed their capacity. But in the second half of 2014, the LED market plummeted and will very likely continue to worsen in 2015.

The LED lighting market seems to have broad prospects, but the industry's threshold is extremely low, especially in downstream sectors of LED lighting, which virtually have no financial and technical thresholds. Price competition prevails in this market. On the other hand, there are a great number of enterprises in the downstream sectors of LED lighting industry that they, to open the market, have to invest capital into marketing. Although LED lighting market looks good, the profit, particularly operating income, shows declining trend. Take example for Cree, a large US company, whose operating margin in Q4 2014 was only 2.5% in sharp contrast to 8.5% in Q4 2013.

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