In 2022, the global demand for LED terminals has significantly declined, and the markets for LED lighting and LED displays continue to be sluggish, leading to a decrease in the utilization rate of upstream LED chip industry capacity, an oversupply in the market, and a continuous decline in prices. According to TrendForce, the decline in both quantity and price has led to a 23% annual decrease in the global LED chip market output in 2022, at only 2.78 billion US dollars. In 2023, with the recovery of the LED industry and the most obvious recovery of demand in the LED lighting market, it is expected to further drive the growth of LED chip output value, estimated to reach 2.92 billion US dollars.

LED commercial lighting is the fastest recovering application in the overall LED lighting market. From a supply side perspective, the LED lighting industry has entered a trough since 2018, leading to the exit of some small and medium-sized enterprises. Other traditional lighting supply chain enterprises have also transitioned to display and other high profit markets, leading to a decrease in supply and low inventory levels.

Therefore, some LED manufacturers have recently taken price increase measures, with the main price increase focused on lighting LED chips with an area less than 300 mils (mils) ²） The following low-power lighting chip products (including) have the highest price increase, with an increase of approximately 3-5%; Special sizes can increase by up to 10%. At present, LED supply chain operators generally have a strong willingness to increase prices. In addition to increasing demand, some LED chip manufacturers are experiencing a full load of orders, and there is a trend of expanding the increased items, in order to reduce losses and actively reduce low gross profit orders.

The main global suppliers of LED lighting chips are concentrated in China. In recent years, as the industry reshuffle intensifies, some international players have been forced to withdraw from the LED lighting chip market. Chinese LED chip players have also reduced the proportion of their lighting chip business, and most of the suppliers still remain in the market. Their LED lighting chip business has been in a loss making state for a long time. The price increase of low-power lighting chips in the Chinese market is the first, and in the short term, it is a measure taken by the industry to improve profitability; In the long run, by adjusting the supply-demand balance and increasing industrial concentration, the industry will gradually return to a normal process.