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Strong Demand for Fine-Pitch LED Displays Propel Prices of LED Chips and Packages

2016-08-31

Prices of LED chips and packages in China rose again during the final week of this August mainly on account of the strong demand from the fine-pitch LED display market, reports LEDinside, a division of TrendForce. 

According to LEDinside, major China-based chip supplier San’an Opto and LED display package supplier Xinda Opto announced price hikes of 10% and 5%, respectively, around the same time in August. LEDinside’s analysis furthermore finds that the average LED usage volume for all indoor LED displays will increase from 60,000 in 2015 to 270,000 per square meter over the next two years. With surface areas of mainstream indoor LED display systems remain constant, the usage volume of LED packages for this application will more than triple during this two-year period.

The market for fine-pitch LED display has now entered its growth period since the concept was introduced by Leyard in 2012 and is expanding rapidly in scale. The booming downstream market and further technological advances continue to drive the consumption of chips and packages for fine-pitch LED displays.

Based on LEDinside’s projection, the global consumption of LEDs specifically for indoor fine-pitch LED displays will reach 29 billion this year and grow at a CAGR of 46% to 189.8 billion in 2021. As China becomes capable of manufacturing LED package materials domestically, production costs will go down further, thereby spurring market growth. Hence, the market value of LEDs for indoor fine-pitch displays will also increase at a CAGR of 21% from US$300 million to US$800 million in the 2016~2021 period.
Outdoor LED displays are also adopting fine-pitch LED packaging. As package manufacturers gradually overcome technological challenges related to development of SMD LED components (e.g. moisture absorption and UV radiation), outdoor LED displays are starting to have more pixel volumes and pixel densities. The pitch requirements are also advancing from P10 on average to P6 and under. Products with smaller pitches are expected to see surging growth in the near future. LEDinside’s analysis finds that the global consumption of LEDs for all outdoor LED displays will grow from 93.6 billion in 2015 to 286.4 billion in 2021. On the other hand, the consumption in the 2016~2021 forecast period will arrive at a CAGR of 20%. 

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