Jan 5, 2017: While Chinese LED chip manufacturer San’an Opto hiked its product prices again, other Chinese and Taiwanese manufacturers may follow the same trend.
Ushering of 2017 brought a surprise for San’an Opto’s clients, when the company informed them in a letter that it would hike the prices of S-30MB and S-32BB LED products by 8%, due to rising costs of raw materials. The new price will be effective from January 10, 2017.
Industry analysts believe that hike in raw material prices will compel other LED chip manufacturers to follow the trend and hike prices of their products as well. Price rise of raw materials, which started off in 2016, will continue in 2017, and will be the key reason for increase in LED retail prices in 2017.
Another reason for the price hike was to compensate the earlier underpriced products.
Earlier, prices of 1030 and 1032 LEDs were raised. These LEDs are used in the manufacturing process of 0.2W LEDs.
Low power LEDs are much in demand, leading to price competition among the manufacturers. This price war has led to low gross margins for the LED manufacturers. Supplies of 1030 and 1032 LEDs has also gone down, as many manufacturers are not willing to manufacture the product, leading to a misbalance in demand-supply.
Epistar, a leading Taiwan-based LED chip manufacturer was the first to increase prices of blue LED chip in 2016. Epistar had also cited higher costs of raw materials as the reason for the hike. However, it is also because Epistar has reduced production of blue LED chips.
According to LEDinside, after Donald Trump becomes the 45th President of the US, he will start large domestic infrastructure projects, which will lead to increase in raw material prices.