Displaybank’s recent market report on the cost competiveness of LED chips. This report conducts a thorough analysis on the supply price history, trends and forecast of main materials that compose packaged LEDs across the entire LED value chain. The key materials include sapphire ingot, substrate, LED chip (or die), frame (PCB, lead frame, ceramic), phosphor (YAG, silicate, nitride), and encapsulation. The supply price of the key materials used in the production of a packaged LED was assumed as the production cost. In addition, IHS has researched the average selling price (ASP) of a packaged LED every quarter since 2010, aside from this report.
In 2012, the 4-inch ingot/substrate lost its price premium compared to the 2-inch product, and the 6-inch product had to lower its margin because of excess supply in 2013. However, such drastic fluctuations in price are not expected to occur after 2014.
The LED chip suppliers have reaped great benefits with the falling production cost of 4-inch-substrate-based LED chips. However, it is expected that they will convert their production systems over to 6-inch or 8-inch substrates in the near future, with the falling prices of 6-inch substrates and enhanced yield rates. According to the report, the production cost competitiveness of LED chips produced on 6-inch substrates will outstrip that of 4-inch, by as early as 2015.
In addition, the report compares the production cost and selling price of packaged LEDs by application; analyzes the margin and cost structure; and forecasts for the cost and price until 2020.