LED makers face growing competition from China

A Chinese company has made it into the world's top 10 LED suppliers for the first time, as European and US companies face increasing competition from China.

Commenting on the news that China's MLS Electronics has risen to the number 10 rank in the worldwide market for packaged LEDs, a report from IHS Technology predicts that top-tier LED suppliers such as Osram and Cree could start to feel the effect of Chinese competition in just a few years’ time.

‘Since 2011, most of the new LED production capacity that has been added worldwide has occurred in China, said Jamie Fox, principal LED analyst for IHS. ‘Because of this, it was inevitable that Chinese companies eventually would penetrate the ranks of the top 10 LED suppliers.’

Currently, Chinese LED firms mainly compete among themselves for a share of the domestic LED market, with only a small proportion of sales going to other countries. The market for general lighting in Europe and the United States has only seen a small impact from Chinese vendors on their sales, but ‘such will not necessarily be the case by the end of the decade,’ the IHS report states.

The leading Chinese LED supplier, MLS Electronics, has risen from 14th to 10th place in the global LED market between 2012 and 2013. No other Chinese firms come near the top ten, or even the top 20, according to IHS Technology.

Fox said: ‘For the major suppliers, MLS’s ascent into the market’s upper ranks represents a clear signal that Chinese firms soon will become major competitors in the global LED business.

China has invested heavily in LED technology and has thousands of small manufacturers located across the country. Concerns have risen about the Chinese domestic LED market reaching overcapacity.

Despite being the largest LED provider in China, MLS Electronics accounts for only 10 per cent of the total LED sales in the domestic market. The next five largest manufacturers collectively represent approximately 20 per cent of Chinese LED revenue.

The other top ten players in the global LED market are based in South Korea, Japan, the US, Germany and Taiwan.

[Pictured: Asia and Australia at night. Credit: NASA Earth Observatory]