It will be a buyer's market for LED in 2018 as a result of China-based chip makers' capacity expnasion, giving packagers an upper hand in price negotiation, according to China's biggest LED packaging service provider MLS.
LED chip prices in 2018 will keep dropping by about 5% every quarter, outpacing the declines in LED packaging pricing, MLS said.
Sanan Optoelectronics and HC SemiTek, the top-2 China-based LED wafer and chip suppliers, expanded production capacities in 2017 and lowered quotes for mainstream LEDs by up to 20% in December.
Sanan also formed a strategic alliance with US-based Cree in 2017 and increased investment in China-based LED packager Shenzhen Refound Optoelectronics at the end of 2017 to maintain utilization of its new production capacity.
SemiTek, China-based Huaian Aucksun Optoelectronics Technology and Taiwan-based Epistar have been main LED suppliers for MLS, with Epistar particularly supplying AlGaInP LED chips and LED filaments. However, MLS bought LEDs from Sanan for the first time ever towards year-end 2017.