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LED packaging firms' Chinese market share falls in 2013

TAIPEI--Light-emitting diode (LED) packaging services providers in Taiwan saw their market share in China decline in 2013 because of escalating competition from foreign rivals, in particular from Japan and South Korea, according to a research report.

Research group LEDinside under the Taiwan-based TrendForce Group said in the report that Chinese companies were the biggest LED services providers in China and presented a serious threat to their Taiwanese competitors.

Taiwanese LED packaging services companies generated US$638 million in sales in China in 2013, down 1 percent from a year earlier, and their market share there fell 2 percentage points to 9 percent.

During the same period, revenue generated by LED packaging services providers from Japan, South Korea, Europe and the U.S. rose 40 percent year-on-year to US$2 billion, the statistics showed.

These foreign providers took a 28-percent share in the China market in 2013, up from 24 percent a year earlier, the figures showed.

LEDinside said the strongest competitors were companies from South Korea and Japan such as Seoul Semiconductor Co. and Tokushima-based Nichia Corp., which won major orders from LED lighting manufacturers in China with the help of their large patent portfolios.

The research group said these Korean and Japanese competitors established themselves last year as the leaders in China's high-end LED packaging market.

Chinese firms grasped a 63-percent share of the China LED packaging services market in 2013, down from 65 percent a year earlier, the report said, despite a 15-percent year-on-year increase in sales to US$4.5 billion.

The sales figure was lower than expected because of a sharp drop in average unit prices, but several Chinese packaging services providers, such as MLS Lighting, Foshan Nationstar Optoelectronics and Hongli Opto-Electronic, outperformed their rivals, indicating that they have upgraded their technology to become more competitive.

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