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CSP Technology Revolutionizing the LED Lighting Industry

      The LED lighting industry is transforming. As LED lighting develops, new technology, applications, and models will drive a revolution in the production process of the industry. Industry insiders have weighed in on the future of the industry at the New LED Technology Conference held by the Shenzhen Light Emitting Diode Industry Association. With more new chip scale packaging (CSP) technology springing up, industry insiders believe that the industry chain consolidation process will accelerate. 

”In terms of new technology, package is the main driver transforming the industry,” said ShineOn Vice President Liu Guoxu. 

Packaging generally takes place in the middle of the LED supply chain production process. The process begins with upstream chip manufacturers who sell different powered LED chips to package manufacturers. The package manufacturers will then produce components and modules with various functions depending on downstream client demands. 

Notable Chinese package manufacturers include Jufei Optoelectronics, Refond Optoelectronics, and NationStar Optoelectronics. 

With the introduction of CPS technology, the traditional production process will undergo significant change. Chip manufacturers can completely skip over package manufacturers in the future and supply standard products for downstream applications. 

The large volume of package manufacturers in China has driven down profit margins. Several market listed LED package manufacturers have been able to secure higher profit margins due to their larger size. Over the past two years however, oversupply in upstream chip production and changing technology have led to a drop in package prices surpassing even the price drops for upstream chips. 

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