LED equipment patent war to upgrade the industry capacity test

Global LED market into the fourth quarter, the traditional off-season usher in a shocking bullet, supply chain industry pointed out that after nearly a year of tight LED supply, the recent LED factory LED products for the mainstream of the first price cuts, individual species decline even as high as 20%.

Price cuts show that the overall capacity supply and demand have reversed, demand slowed down in the terminal market, land plant capacity continued to release, some industry insiders believe that the LED market oversupply crisis is likely to re-emerge, the current downstream manufacturers are still waiting to see.

LED chip prices and the relationship between supply and demand, LED chip prices violent non-real situation. Fourth quarter the overall price decline in less than 5%, gross margin stable.

However, although there is not much chance of falling LED prices, the downward pressure on the prices may continue into the first quarter of 2018, affecting some of the manufacturers.

Internally, due to the strong manufacturing, R & D, customer scale effects, powerful chip makers in the production costs have dropped to some extent, so there is room for price cuts. For the sake of maximizing profits, big chip makers will increase market share through price cuts and erode the original share of small vendors that do not have economies of scale. This may be a chip price cuts become a continuous move.

Look at the scale of global chip supply and demand, the domestic LED chip makers already occupy most of the world's production capacity. The chip industry, a huge capacity to release, to fundamentally change the relationship between supply and demand. In this case, the chip price is not surprising, all in anticipation.

By depreciating the price adjustment to profit maximization position, while forcing the marginal manufacturers to withdraw and reduce the earnings expectations of new entrants into the market, take preventive measures, probably the main motivation of the current round of chip giant initiative to cut prices.