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After entering this year, various enterprises have begun to adjust their strategic layout and have shifted to the high-end market and LED segment market. Among them, with the rapid growth in demand for commercial and industrial lighting, the demand for COB products with excellent lighting performance has also increased rapidly, and has become a hot spot in the LED industry.
According to the data from the LED Research Institute of High Industry and Research Institute (GGII), by 2017, COB will account for about 15% of the output value of LED lighting packaging, and it has a large market in the field of commercial lighting. After nearly 6 years of development, COB's own advantages have become increasingly prominent.
Of course, the larger the market space, the greater the competition, and the threat of a price war similar to SMD devices. Is COB still far from a price war? Let's see what the COB manufacturer says.
Material prices rise, making it difficult to reduce COB prices
I believe you have also noticed that in the past two years, most packaging companies have flocked to COB, coupled with the continuous decline in chip prices, resulting in a rapid decline in COB prices. However, these are the laws of market development.
Dr. Shao Pengrui, Technical Director of Jingtai Co., Ltd., believes that since 2016, the entire LED market has been developing in a good direction. With the rapid growth in the penetration rate of the LED lighting market, the development of the COB market will gradually become rational.
In fact, it's not just COB, but there's not much room for price reduction of various LED devices, or they're all selling at a low profit, even some companies are selling at a loss. Yin Hui, deputy general manager of Sunrise Optoelectronics, estimated that "under this premise, the price of COB will not fall significantly as in the previous two years."
Wang Mengyuan, General Manager of Zhonghao Optoelectronics, also said, "At present, the COB price in the packaging market has hit the bottom. As major raw material manufacturers gradually adjust prices upward, the downward trend of COB prices has slowed in the third quarter."
In fact, COB has gradually become a new demand point in the market since 2010. Up to now, its price has been decreasing for six consecutive years, from a few yuan per watt initially to a few cents per watt now.
According to Song Dong, Vice President of Jingke Electronics, among the commonly used COB light source products, the proportion of each part in the price is ranked in the order of chip, gold wire, glue, and bracket. Among them, chips account for more than 50% of the cost of light sources, and some even close to 70%. Therefore, the rapid decline in COB prices largely depends on the decline in chip prices.
After two years of price competition, the COB market has gradually become rational this year, while the prices of chips, phosphors, glue, and other auxiliary materials have reached a relatively historical low. Next, COB's price reduction space is very limited.
Indeed, this year's market has reversed, with "price hikes" in the LED industry rising one after another, with prices of chips, packaging, display screens, and raw materials rising all over the world.
In response, Wang Gaoyang, Deputy General Manager of Hongli Optoelectronics, said, "Because there is not much room for the price of upstream raw materials to decline, there will be no significant changes in COB prices in the short term."
Competition among manufacturers is fierce, and market segmentation has become the focus of development.
The market has always been very brutal, and the price war that continues to refresh the bottom line has led many packaging factories to exit. As packaging raw materials are facing a trend of rising prices, the downward trend in COB prices will also slow down.
According to Wang Mengyuan, "Due to fierce market competition, packaging manufacturers will focus on market segmentation to maintain product gross profit margins."
Judging from the current market situation, COB prices will continue to decline in the next few years, but the next price reduction space for COB is already very limited. In Song Dong's view, "The increasingly thin profits of COB will force enterprises to upgrade their process technology, generate a performance premium, or form a new value system. Flip COB with smaller light sources and higher light efficiency will become the next market trend."
However, most manufacturers hold a wait-and-see attitude towards the mass production of flip chip COBs. Song Dong analyzed that the main reason is that the current supply chain of flip chip COB is not mature, and domestic enterprises are mostly making samples, resulting in a high defect rate and temporarily unable to mass produce. At the same time, non-uniform dimensions, different processing needs, and customer needs also lead to increased difficulty in mass production in the market.
As we all know, COB has a natural advantage of good light quality, which has greater advantages in controlling the quality of light and color in optical design effects. However, the industry often ignores this advantage and is limited to indicators of light efficiency and energy conservation.
Wang Gaoyang frankly stated, "The current COB light source technology is becoming increasingly mature, and the market has a stronger demand for COB light sources. Packaging manufacturers no longer stay in the initial technical solution stage, but shift to the cost-effective stage of pursuing high-quality and high-efficiency COB. Flip chip solderless packaging technology with high-performance and high-quality performance has also become a new direction for COB light sources.".