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Do You Still Feel That Our Products Are Expensive? This Article Tells You Why It's Expensive.

Shenzhen Lights Technology Co.,Ltd | Updated: Mar 23, 2017

Since last September, the news of rising prices of raw material rumors in the LED industry. From the country's largest chip companies San'anOptoelectronics Company to Xiamen Xinda Company, and even encapsulation giant Forest Lighting company and other chips, packaging manufacturers have sent the price adjustment letter. And manufacturers are given the same reasons for price adjustment, without exception, because the bottom of raw material prices and labor costs and other factors.

In fact, since May last year, Epistar Optoelectronics Company which is on the other side of the Straitannounced the news of rising price, the major domestic manufacturers had itched to try. For the rising price of chip and packaging materials, the industry have applauded, and want to follow up. Whatsmore, professionals said that the increasing price is due to the normal market rules, indicating that the LED market competition isgradually return to rational.

Chip and encapsulation manufacturers increase the price collectively

In May, 2016, Epistar Optoelectronic Company started the "first shot" of increasing the price of chip, Blu-ray LED prices will rise 15%. Then San’an, Hua Can and other mainland chip manufacturers have also carried out price adjustment. By the end of August 2016, LED chips, packaging companies increases the price collectively, part of the small and medium size products prices of Xiamen San’an will rise 10%, from August 25, 2016 to begin implementation; price of RGB Lamp of Amp Optoelectronics, Xiamen Xindeco Optoelectronics Co., Ltd and Forest Lighting also raised 5%, since September 1, 2016 began to implement.

 the price adjustment letter of San’an Optoelectronics Company’s shows that raw material prices bottomed out, including gold (up more than 27% compared with the begining of 2016), the substrate (up more than 30% compared with June); at the same time, due to small and medium power size chip, after the process of consumption of a large number of sorting and testing capacity, unit labor costs, resulting in a sharp decline in the output value of the latter part of the process. Is now part of the small and medium size products prices floating 10%, and in August 25, 2016 implementation.

From the price adjustment notice of Forest Lighting Company, it shows that due to changes in the market, leading to rising product costs, in order to cooperate with each other and maintain a good business relationship, according to the actual situation of raw material prices. Based on the principle of mutual benefit, scheduled that from September 1, 2016 ,the price of RGB lamp increased by 5%.

The price adjustment letter of Xindeco Optoelectronics Co., Ltd shows that, by the upstream chip and stent prices rose sharply (generally more than 10%), coupled with rising labor costs, especially for the company's production of RGB lamp beads on the basis of the current increase of 5% The The price adjustment has been implemented since September 1, 2016. The price adjustment, including Fujian Xindeco, Guangdong Xindeco, Anpu Guang, Xiamen Xindeco, four subsidiaries of the product, and the price adjustment rate is about 5%.

The main reason for the price adjustment given by the manufacturers is due to the recent rise in various raw materials and labor costs, has exceeded the cost of accounting, in order to maintain profit can only choose price increases. From the manufacturers issued by the price adjustment letter can also be seen, the recent period, used in LED raw materials, sapphire substrate, aluminum plate, gold and so have different levels of price increases.

Through the finishing of the major manufacturers issued price information is not difficult to find, the current price increases are LED display chip and packaging products, especially small pitch products. LEDinside senior analyst Wang Fei that a small pitch LED display has entered the market growth period, the market size is rapidly expanding. Downstream strong demand and technological progress space will lead to small pitch packaging and chip consumption to grow rapidly. He believes that the display and backlight packaging products will be driven by a small range of demand, the price will have a certain increase in space, "and lighting packaging will face upstream and downstream extrusion.

 


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