Full industry chain coordination on price adjustments, high-value transformation becomes the key to breaking the deadlock

Can High-Value Transformation Alleviate Cost Pressures in the LED Industry?

[Global Network Finance Comprehensive Report] The price adjustment trend across the entire LED industry chain continues due to factors such as the sustained rise in raw material prices. Recently, multiple companies, including Lehman Optoelectronics, Zhouming Technology, and Aoto Electronics, have successively issued or updated product price adjustment notices. According to statistics, since the end of 2025, nearly 60 LED companies have coordinated price adjustments, covering the entire industry chain including chips, packaging, power supplies, ICs, and displays. In the context of widespread pressure on industry profits, this round of price adjustments is both an inevitable consequence of cost transmission and reflects the industry’s trend of shifting from “price wars” to competition based on technology and quality.

Xu Diheng, general manager of Anhui Zhongheng Optoelectronics Technology Co., Ltd., stated that the price of LED displays purchased this year has increased by more than 5%. Recently, dozens of LED companies have issued price adjustment notices, marking the most concentrated occurrence in nearly three years. In terms of the extent of adjustments, there is structural differentiation across various segments, with packaging and downstream application products generally increasing by 3% to 25%. Driven by high copper prices, some PCB suppliers have seen increases of up to 10%. Due to rising prices of memory chips and tight wafer capacity, some power supply products have had price adjustments ranging from 8% to 15%. Unlike previous localized price adjustments, this round of adjustments exhibits characteristics of industry-wide coordination: the midstream packaging segment was the first to concentrate on issuing notices, followed by upstream and downstream coordination, covering core segments such as chips, packaging components, PCBs, and commercial displays.

Regarding the midstream packaging segment taking the lead in concentrated price adjustments, industry insiders analyze that this is mainly because it is sensitive to cost changes and sits in the “buffer zone” of the industry chain. Compared to upstream and downstream, packaging companies lack bargaining power against upstream raw material price increases and find it difficult to fully transmit cost pressures downstream in the short term. As raw material prices continue to rise, costs reach the breakeven point, and companies can only passively adjust prices to cushion profit erosion, leading to downstream follow-up. However, implementing price adjustments is not an easy task. A senior executive from a listed LED packaging company revealed that although the price increase notices have gradually taken effect, due to the wide range of choices available to downstream customers, companies are generally concerned about losing market share by being the first to implement new prices, making progress challenging. In the terminal market, reporters found that some distributors are still primarily focused on digesting inventory, and the pressure from price increases is expected to be gently transmitted to the consumer end within the next one or two quarters.

Oriental IC

This round of price adjustments across the entire LED industry chain is not coincidental. Industry analysts believe that it is both a direct reflection of the sustained rise in raw material costs and an inevitable process of value restoration following a long-term “price war.” From the cost side, key materials such as gold, silver, and copper account for over 70% of LED packaging costs, and their price fluctuations directly impact profits. Since 2025, international gold prices have risen by over 70%, silver prices have increased by about 148%, and copper prices have also risen by over 36%. Such cost pressures are difficult to absorb through internal cost reductions within companies. From the industry’s perspective, this round of adjustments is an inevitable choice for restoring the industrial ecosystem. From 2022 to 2025, the LED industry fell into homogenized competition, with the average price of mainstream products dropping by 30% to 40%, and the average gross profit margin of the industry declining by about 50%. Taking San’an Optoelectronics as an example, its gross profit margin declined sequentially in the first three quarters of 2025. Li Guanqun, secretary of the board of directors of Mulinsen, stated that the current profit margins in the industry are at low levels, and it has become a consensus within the industry to restore profits through moderate price increases and break free from chaotic low-price competition. Additionally, the growing demand in emerging application areas has also provided support for this round of price adjustments, with high-growth, high-margin segments such as Mini/Micro LEDs and automotive LEDs experiencing strong demand, driving up the prices of related products.

In the past three years, the LED industry has undergone three rounds of concentrated price increases. Regarding whether this round of adjustments can cover rising costs, the industry generally maintains a cautious attitude. TrendForce analyst Yu Bin stated that this round of price increases mainly alleviates cost pressures for midstream companies, but the already low gross profit margins have not seen substantial recovery. Zheng Haiyan, chief analyst of the LED industry chain at Runto Technology, believes that this round of price adjustments is like a “stress test,” with uneven transmission across various segments of the industry chain, which will accelerate the reshuffling of the industry landscape. The key to breaking the impasse lies in breakthroughs in high value-added applications and coordinated cost reduction across the industry chain; merely increasing prices cannot resolve cost pressures, and companies must reshape their cost structures through vertical integration and technological innovation. Leading companies have already made adjustments, with Zhouming Technology stating that it has established a systematic response mechanism, and Leyard disclosing that new orders for Micro LEDs have increased by over 40% year-on-year. The industry generally believes that the LED industry is at a critical juncture of cost transmission and industrial upgrading, and the differentiation within the industry will further intensify, with the real turning point still requiring time to emerge. (Wen Xin)