|The performance of Cree's lighting division looks particularly good considering both tariffs and excess capacity in the industry.|
China LED chip makers see high inventory
Siu Han, Taipei; Adam Hwang, DIGITIMES Friday 22 February 2019 0 Toggle Dropdown
China-based LED chip makers saw inventory pile up to CNY6 billion (US$882 million) at the end of 2018 due to oversupply, according to industry sources.
With local government subsidies, many China-based LED chip makers expanded production capacities in 2018, but demand fell far short of expectation, resulting in continual price drops and increasing oversupply, the sources noted.
During the first three quarters of 2018, prices for entry-level and mid-range white-light LED chips dropped 30-40% and those for high-end models fell 10-20%, the sources indicated. Some China makers had to lower capacity utilization to below 50% at the end of 2018, the sources said.
Huaian Aucksun Optoelectronics Technology, one of China's top-3 LED chip makers, saw about CNY89 million in profts from LED sales in 2018 but expects chip prices to further fall in 2019 resulting in operating loss, the company said. Aucksun has monthly production capacity of one million LED epitaxial wafers, with the largest China-based LED packaging service provider MLS being a major client and a shareholder.
Sanan Optoelectronics, the largest China-based LED chip maker, and HC SemiTek, despite continued oversupply, are sticking to their production capacity expansion schedules, which is expected to worsen the oversupply, the sources indicated.