Recently years overcapacity of LED LAMPS leads to thinning of LED CHIP profits. Various led chip manufacturers have successively issued the 2023 annual report. The annual report shows that the era of high-margin LED chips has passed. Domestic LED chips have excess capacity and profits continue to decline. It is worth noting that operating income rise sharply, but profits of led chip was fall. In our annual report, we found that the gross profit rate of the entire industry decreased by 14.36 percentage points year-on-year to 25.31%.
It is reported that with the application of LED chip technology in the field of led lighting, the entire industry entered a period of rapid development in 2019 and was considered as a sunrise industry. At that time, the industry expects that by 2025, LED lighting will occupy 30% of the general lighting market, LED lighting industry. The scale will reach 800 billion yuan, and the export will reach 30 billion U.S. dollars. LED lighting cakes are tempting and the market prospects are good, bringing in all kinds of capital.
However, with all the capital's one after another shot, the LED chip industry clearly began to oversupply. A representative of a company that did not wish to be named pointed out that the current inventory is high, and the average chip company can use six months of inventory. According to Qi Faxin, a senior analyst and LED project manager at SEMI China, in fact, the LED market demand did not decrease in 2022, but the capacity expansion far exceeded the demand. Moreover, in the field of high-end lighting, domestic manufacturers do not have too much market share, and they can only fight price wars in the low-end market, causing structural overcapacity.
The stagnation of LED TV sales is also the reason for reduced demand for chips. The LED chip is the main component of the LED TV, but in 2022, the color TV market is very sluggish, and it cannot pull upstream production and sales scale.
It is worth noting that although production and sales are slow, there are still companies that are expanding. The LED chip company of Taiwan is expanding production; The joint venture Plant also increased the production of LED chip production equipments.
The industry generally believes that the oversupply of LED chips, the profits certainly can not be quickly improved, and continuous expansion will only lead to further lower profits.
