Having fallen 5-15% in third quarter 2011, LED prices are expected to continue dropping in the fourth quarter amid oversupply pressue.

According to research firms, prices LED TV backlight units (BLUs) decreased around 8-15% in third quarter mainly due to South Korean firms clearing out inventory. The prices are likely to continue dropping.

Prices of LED BLU for notebooks and mobile devices dropped around 5-10%, and 8-10% for mobile phones, in the third quarter. This segment is currently dominated by Taiwan-based firms, but competition will heat up as more and more China-based firms are entering the market.

Price competition continues among international firms, especially when facing potential customers. Japan-, South Korea-, Europe- and US-based firms all have been lowering the prices.

Prices of high-power LEDs for lighting decreased around 8-10%. The decrease was less significant compared to second-quarter 2011, showing that demand in the lighting market has stabilized.

The government of Australia has also began to replace traditional street lamps with LED street lamps. China will begin to eliminate the use of incandescent lights by end of the year, which is expected to create demand for LED lighting products.