In order to help accelerate the development of the LED industry, Chinese manufacturers are increasing investment in product development and related activities, and the average investment level will account for about 5% of operating income. Most suppliers are stepping up production to meet growing domestic demand, and manufacturers are expected to invest in increased capacity. Guangdong Province may issue large orders for the 1,500km LED streetlight project, which covers Dongguan, Foshan, Guangzhou and Shantou.
Some R&D programs are designed to cope with the expiration of several LED patent technologies. Exposing these solutions will allow vendors to develop new lighting concepts and enhance competition in this market. For example, in 2008 Chinese companies applied for nearly 26,000 patents, most of which belonged to LED packaging technology and applications.
For diode-based products and other light sources, increasing energy efficiency and reducing costs will be the focus of research and development. The focus will also be on improving durability and product life.
Currently, the life of LED bulbs is usually around 10,000 hours, but some designs are above this average. At the same time, most CFLs have a lifespan of more than 5,000 hours. More than 8,000 or even 10,000 hours of products are also available.
The price depends on the power, size, materials of manufacture and the technology used. Most of the raw materials are purchased from domestic companies, but some are purchased from overseas as needed. For example, ABS is usually imported from South Korea. Several thermoplastics produced in Taiwan can also be used.
LED product manufacturers typically buy diodes and chips, the latter mainly from the US or Taiwan. Other lighting solutions are usually purchased from well-known companies such as Cree, Philips, Osram and Nichia.
The cost of most raw materials is expected to remain stable in the coming months. As the main packaging technology patents will expire in the year, the price of LED chips is expected to drop by 5-10%. The expiration of the patent may reduce the license fee and stabilize the price in the next six months.
LED-based products are expected to expand penetration in both residential and non-residential areas. As technology advances reduce costs and prices, market acceptance of these products will accelerate.
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