LED Driver Chip, When Will The Price Increase Stop?

e increase in the LED industry in 2021.

At that time, due to the comprehensive impact of external factors such as the epidemic, trade frictions, inflation, and internal factors such as tight supply, the entire LED industry chain experienced varying degrees of development, from raw materials, chips, driver ICs, devices, to displays and lamps. price increase.

Specific to the LED driver chip, the price increase will start in 2020, and the reason for the price increase is the sharp contradiction between supply and demand.

On the one hand is the terminal application link. Since the third quarter of 2020, the market demand for distance education and remote office has increased; the demand for products related to the home economy such as mobile phones, computers, and health lighting has also continued to rise; the development trend of emerging applications such as plant lighting, Mini/Micro LED, and UVC LED good.

Another aspect is the market segment. At that time, the production capacity of foreign manufacturers was severely affected by the epidemic, and China’s epidemic prevention and control were properly controlled, and production and operation activities were resumed earlier, which accelerated the concentration of global manufacturing capacity in the Chinese market, and the Chinese LED market ushered in a demand peak.

The surge in demand has increased the demand for raw materials. As the upstream of LED driver chips, the already scarce wafer foundry and packaging and testing capacity are even more stretched.

Supply is insufficient, but demand has surged, and the price increase of LED driver chips is not difficult to understand. It is reported that LED driver chip companies such as Chichuang North, Jingfeng Mingyuan, Fuman Micro, Silan Micro, and Ming Micro Electronics have raised product prices several times since the third quarter of 2020.

The surge in prices continued for months. Until August 2021, with the expansion of fabs, the production capacity of LED driver chips gradually increased, while the growth rate of terminal demand including Mini/Micro LED, plant lighting, outdoor lighting, etc. did not meet expectations. The contradiction between supply and demand was finally eased, and prices stopped rising.

And this trend is also reflected in the financial reports of LED driver chip companies.