Jack Kuo, an assistant research manager at LEDinside, noted that backlight-use LED inventories were high in the third quarter, as order visibility was only 1-2 months. As the global mobile device market matures, demand for smartphones is falling, causing mobile phone backlight-use LED prices to fall 5%.

In addition, because of the traditional slow season and the World Cup coming to an end, the TV backlight-use LED market is cooling. Global TV panel shipments will fall 6-8%. This will affect Chinese brands’ procurements.

As the LED TV backlighting market undergoes a seasonal adjustment, the average price of 3528 LED used in direct-type LED TV fell 8% to US$0.24 while the average price of 7020 2-in-1 LED used in edge-type LED TV dropped 8% to US$0.12.

In the lighting-use LED market, fierce price-cutting by Korean manufacturers decimated profits, as mid-power LED products such as the 5630 were sold at close to their manufacturing costs.

In that sub-sector, there is very limited space to slash prices further. By contrast, in the high-power LED market, there is considerable room for prices to fluctuate. LED prices at high-current 800mA fell most sharply, up to 12%.

In the Chip-On-Board (COB) sub-sector, Cree, Citizen, Bridgelux and other manufacturers are all introducing small-size, high luminous efficacy, high-density (HD) products, to which the market has responded enthusiastically. Some of those products are equipped with special features, such as smart wireless controls.

“As the functions of LED products are upgraded, customer orders will gradually shift toward high-efficiency products,” Jack Kuo said.