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LED lighting market fails to glow in 2015 due to oversupply

LED lighting market fails to glow in 2015 due to oversupply

By BizLED Bureau

Dec 2, 2015: The average prices of LED lighting products in the global LED market have slumped by 30-40% in 2015 due to oversupply of LEDs. According to industry analyst Roger Chu, a large number of manufacturers have incurred heavy losses and are exiting the market. There is still a strong demand for high brightness LEDs, but the value of the market is surprisingly up by only 2% this year, amounting to $14.52 billion, Chu said.

Consequently, demands are scaled back and LED manufacturers are now undercutting each other in order to maintain their capacity utilization rates. The price lowering has also meant that the manufacturers are shifting their strategies and focusing on the niche market.

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Chu says that it will be worth $14.95 billion in 2016, a rise of only 3%, year on year. This shows that LED-based lights are under immense downward price pressure and the entire market is feeling the heat. However, Chu expects the big price declines to moderate in 2016. In the year 2015, the cost of sales to make an LED light bulb, for example, is the same as its cost. He said that Chinese LED manufacturers are likely to make serious acquisitions by picking up international LED patents and lighting brands.

As prices continue to spiral down, Chu said that buying an LED is close to the cost of traditional energy saving bulbs.

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