iSuppli said China's light-emitting diode (LED) market will double between 2009 and 2014, driven by government subsidies and market demand for LCD TVs and total lighting.
Before 2014, LED revenue in China will reach 7.1 billion US dollars, compared with the revenue of 3.4 billion US dollars in 2009, the annual growth rate is 12.8%. Ultra-high brightness (UHB) LED will grow especially fast. The revenue increased from $686 million in 2010 to an estimated $1.8 billion in 2014.
The trend of LED revenues in China from 2009 to 2014 in iSuppli's forecast report.
VincentGu, a senior analyst at iSuppli who specializes in the Chinese market, points out that Chinese LED manufacturers lack technical content, management team experience and research and development staff in the production process compared to the US and Taiwan's rivals, but China has government from the government. The strong financial support allows them to take a slice of this demanding market. The Chinese government is responsible for at least 70% of the expenses, or an average of 1.5 million for each machine purchased for metalorganic chemical vapor deposition (MOCVD) (for LED production). Furthermore, the local government will use the tax and utility benefits of the people to support the development of LED.
iSuppli is optimistic that the government's financial support will stimulate Chinese LED producers to spend an additional $3.5 billion annually on LED-related production equipment between 2010 and 2012. This overhead enables producers to solve technical problems, including lack of intellectual property, production equipment and lack of LED chips.
Gu also added that with such large capital expenditures and foreseeable technological advances in the next few years, Chinese LED producers can enter the global market as strong competitors after 2015.
LED market prospects diversify
The domestic LED market covers a wide range of LED displays, street lights, general lighting, traffic signals, and LED displays for mobile phone keypads, digital cameras, large LCD TV displays, laptops and other displays. China's LCD backlight application market share will reach 1.2 billion US dollars in 2014, compared with 468 million in 2010.
A new demand has emerged that will push the development of LEDs to a more stable and long-term direction. It is comprehensive lighting. The world is working to reduce carbon dioxide emissions, which indirectly continually drives the demand for more energy-efficient and low-consumption LEDs, as well as in the overall lighting market. iSuppli estimates that in 2010, the overall lighting market accounted for 18.4% of the entire LED market.
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