Gartner: 85% of Logistics Leaders to Boost Outsourcing Budget
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Englewood, Colo. − Leading light-emitting diode (LED) suppliers continue to increase their capital spending and production due to government incentives and to take advantage of an expected surge in the lighting business, despite an oversupply in the market, reported IHS.
"The global market for LED lighting is expected to double during the next three years," said Alice Tao, senior analyst, LEDs and lighting for IHS, in a statement. "The prospect of this massive growth is irresistible to LED suppliers, who don't want to be caught short of supply during this expected boom. But given the rising investments in manufacturing equipment, the acute LED oversupply already in existence is expected to continue through 2016."
The supply of LEDs, measured in terms of manufactured die, is expected to exceed demand by 69 percent in 2013 and in 2014, according to IHS. It's expected to decline slightly to 61 percent in 2015 and 40 percent in 2016.
Factory utilization rates are increasing at major LED companies in Asia, according to Tao. In South Korea utilization rose to about 75 percent in the second quarter, up from 60 percent in 2012, while some Taiwanese and Chinese companies reached 90 percent in the second quarter, stated Tao.
Spending and increased utilization rates are occurring despite a glut of supply in the market since 2010, stated Tao. She said the "surplus started when LED suppliers made major investments in capacity in 2010 and 2011, stemming from the efforts of local governments in China to subsidize metal organic chemical vapor-deposition (MOCVD) purchasing. "
IHS projects that the MOCVD market (tools used for LED manufacturing) will rise 17 percent in 2013, marking the industry's first annual growth since 2011, and a turnaround from a 70 percent decline in 2012.
Major LED suppliers include San'an (China) Elec-tech (China), Samsung (South Korea), Seoul Semiconductor, (South Korea), Epistar (Taiwan), Philips Lumileds (U.S.), and Osram (Germany).
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