News: Markets
25 May 2021
Lighting LED price hike in Q2 to drive market to $6.709bn in 2021
Product prices across the overall lighting LED market are expected to increase by about 0.3-2.3% quarter-on-quarter in second-quarter 2021, reckons market research firm TrendForce.
This price hike can be attributed primarily to overall demand in the LED lighting market rebounding since Q1/21 and remaining in an uptrend in Q2/21. Furthermore, the industry-wide shortage of LED components in the upstream supply chain, caused by the onset of the COVID-19 pandemic, has yet to be addressed, compelling lighting product manufacturers to ramp up their procurement activities this year in order to avoid a component shortage, which they suffered last year. TrendForce hence expects this bullish trend in the LED supply chain to result in lighting LED market revenue growing 3.43% year-on-year to $6.709bn for full-year 2021.
TrendForce further indicates that major suppliers of lighting LED packages, including Samsung LED, ams/Osram, Cree LED, Lumileds, Seoul Semiconductor, MLS and Lightning Optoelectronic, have since Q1/21 seen soaring revenues, which are expected to persist through Q2/21 due to a swift rise in demand for human-centric lighting (HCL), smart lighting, horticultural lighting and niche lighting (such as lighting for nuclear power stations, pharmaceutical manufacturing facilities, and metal fabrication plants).
Regarding the specific LED packages that will see a continued price hike, these products include mid- and low-power, indoor lighting LED products with under (not including) 1W in power consumption, such as 2835 LEDs, 3030 LEDs and 5630 LEDs. Prices of these products are expected to increase by 0.3-2.3% quarter-on-quarter in Q2/21. On the other hand, a 1.3-1.8% quarter-on-quarter increase in prices for the same period can be expected for outdoor, industrial high-power lighting LED products with at least 1W in power consumption, such as LEDs with ceramic substrates and 7070 LEDs.
Companies releasing products post-pandemic to secure market share ahead of high demand for LED lighting
Regarding the movement of lighting LED product prices from the perspective of the LED supply chain, the pandemic caused a price hike across various materials, such as metals and LED chips required for lighting LED manufacturing last year. Faced with the upward pressure of prices in their upstream supply chains, certain suppliers of lighting LED products were subsequently forced to maintain their bottom lines by raising prices accordingly on lighting LED products, which had been sold at excessively low retail prices.
On the whole, however, despite the price hike across various upstream components, suppliers of lighting LED products are still actively improving their products’ performances, including luminous efficacy and color saturation, and releasing products that fulfill the demand of post-pandemic applications in order to secure their market shares and competitiveness. Some examples include outdoor atmospheric lighting LED products from Osram and Lumileds, as well as horticultural LED products from Cree LED for indoor horticulture and plant factories.
