Taiwanese LED Bulb Makers Cut Prices to Boost Demand

With Cree cutting prices of its 60W and 40W replacement LED bulbs by at least 70% as of November 2013 from the same month of 2007, Taiwan's LED bulb makers are struggling to follow suit to shore up shipment volume, sparking buzz that in 2014 household LED lamps will become major revenue generator for them.

Industry executives say the island's LED makers involved in bulb manufacturing include packagers Everlight Electronics Co., Ltd. and Unity Opto Technology Co.; chipmakers Epistar Corp., Formosa Epitaxy Inc. (FOREPI), and Genesis Photonics Inc., as well as integrated manufacturer Lextar Electronics Corp., who will benefit from raising shipment volume.

Manufacturers of LED light bulbs have been underselling since March 2013, when Cree rolled out sub-US$10 light bulbs, according to market consultant LEDinside.

The organization's statistics show that median prices of LED bulbs for replacing 40W and 60W incandescent bulbs further dropped nearly 30% to US$15.4 and US$21.5, respectively, in November 2013 after falling to US$19.4 and US$29.67 in January. For 60W replacement LED bulbs, the November prices dropped 70% relative to over US$70 seen in  2007.

Chairman Robert Yeh of Everlight Electronics Co., Ltd., currently the world's No.1 LED packager by quantity, said there is no end in the price war, but the cuts must push up market scale to be still profitable to suppliers.

With the price downtrend, LED lamp makers, Yeh noted, always have to balance inventory backlog and loss from price cuts. To navigate through hard times, manufacturers need to constantly lower inventories while increasing inventory turnover.

LEDinside projects the 2014 market for LED light bulbs to shoot up 86% from 2013 due chiefly to more discount promotions. (KL)