Mini LED demand spike causes LED Chip prices to surge

With various companies gearing up to launch their own offerings of laptops, tablets, monitors, and TVs with the new Mini LED backlighting, suppliers have been pushing production capacities to meet the surge in demand. However, this has also led to the rise in the price of conventional LED chips as well.

https://www.szradiant.com/products/fixed-instalaltion-led-display/fine-pitch-led-display/

According to a TrendForce report (Via EETAsia), multiple firms in the LED supply chains had started manufacturing LED chips ahead of time, in the fourth quarter of last year. But despite this, the explosive growth in demand for Mini LED chips has led to crowding in their production capacities that have also affected other mainstream LED chips. Due to this, the global supply chain has been witnessing a shortage of LED chips, which has led to certain suppliers raising the quotes on chips supplied to their non core clients that bring relatively low gross margins.

These price hikes are generally around 5 to 10 percent. Furthermore, the report adds that the companies in the LED supply chain have also begun aggressively procuring components in other to mitigate these upcoming price hikes on raw materials and the shortage of components. This is primarily due to tight production capacities for manufacturers after the Chinese New Year. These shortages have already affected certain serial numbers or specifications. 

https://www.szradiant.com/products/fixed-instalaltion-led-display/fine-pitch-led-display/

TrendForce believes that the structural shortage that is affecting the LED industry is primarily due to the market’s underestimation of production capacity that was necessary for key parts of the supply chain. Thus, suppliers are currently enjoying an increased bargaining power in price negotiations of LED chips due to the rise in material costs and limited material supplies as well.


Post time: May-10-2021

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