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Breaking: LED Packaging Companies Raise Prices 5%–10%; Three Drivers Revealed
Staff Reporter: Wang Xiaolei
In recent days, the LED packaging industry has seen a round of price adjustments: companies including Mulinsen, Jingtai, and Shanxi Xingxin Semiconductor have issued notices raising prices on certain products by 5%–10%.
Although the stated reasons differ—Mulinsen and Shanxi Xingxin Semiconductor emphasize “continuing to ensure high-quality products and services,” while Jingtai cites “rising prices of basic materials”—the underlying issue is the same: cost pressures shared across the industry.
1. Raw-Material Costs Are Surging: From Gold to Substrates, Increases Across the Chain
The major cost components of LED packaging have collectively moved higher, making raw-material inflation the core driver behind downstream price hikes.
Gold at Record Highs; Over 70% of Packaging Cost
In April 2025, spot gold surpassed USD 3,500 per ounce, setting a historical record. As a key material in LED packaging processes, gold accounts for more than 70% of total packaging cost. Its sharp rise has put immediate pressure on manufacturers, who are passing on costs through price adjustments.
High-End Packaging Substrates in Short Supply, with Prices Doubling
Supplies of high-end substrate materials such as BT resin and ABF substrates remain tight. The lead time for BT materials from Mitsubishi Gas Chemical (MGC) has stretched to 16–20 weeks—roughly double the normal cycle—and prices continue to climb due to supply-demand imbalance. Even more critical, low-CTE glass fiber cloth used in packaging substrates has seen price increases of 15%–300%, driven by surging demand from AI servers. These materials underpin packaging for LED displays and memory chips, directly pushing up device costs for manufacturers such as Mulinsen and Jingtai.
Copper and Silver Prices at Elevated Levels
In the first half of 2025, international copper prices rose to USD 12,300 per metric ton, up 21% year over year; London spot silver briefly exceeded USD 39 per ounce, marking a near 13-year high. Copper and silver are core raw materials for lead frames and bonding wires in LED packaging, and their elevated prices have further squeezed profit margins.
2. Tariffs and Supply-Chain Reconfiguration: Hidden Costs Keep Flowing Through
Lagged Effects from U.S.–China Tariff Adjustments
Although the two sides suspended the additional 24% tariffs as of August 12, 2025, prior measures had already lifted import costs for semiconductor equipment and materials. For example, in the wafer foundry stage, higher tariffs added roughly USD 10–20 per wafer. This burden has been passed along through the supply chain to packaging companies and ultimately needs to be absorbed via price adjustments.
Supply-Chain Shifts Are Pushing Up Procurement Costs
With the global semiconductor supply chain accelerating its shift away from China (“de-Sinicization”), Taiwan-based outsourced semiconductor assembly and test (OSAT) providers are taking on more orders, increasing market concentration and bargaining power. Meanwhile, domestic manufacturers relying on overseas procurement of key materials or equipment must shoulder higher transportation and tariff costs, which are reflected in final product pricing.
3. Competitive Landscape Is Changing: From “Price Wars” to “Protecting Margins”
For a long time, the LED packaging industry suffered from a “cost–price inversion,” and intensifying competition made price wars the norm. Many companies fell into a vicious cycle of low margins → underinvestment in R&D → even greater reliance on low pricing. As industry concentration rises, manufacturers are moving to avoid losses and preserve reasonable profitability for sustainable operations—hence the decision to raise prices. Industry observers expect this round of increases could trigger broader follow-on moves, nudging LED packaging away from low-price competition toward more rational pricing.
Industry Outlook: From “Scale Dividend” to “Technology + Brand Dividend”
The LED sector has entered a mature phase. While Chinese manufacturers hold a global lead thanks to comprehensive supply chains and scale production, a price-only playbook is no longer sustainable.
Facing cost pressures, companies are exploring new paths:
Bet on high-end tracks: Focus on Mini/Micro LED, LED cinema screens, and XR virtual production; differentiate through chip design optimization and packaging-process innovation.
Shift to solution provider: Evolve from selling products to delivering “product + service + customized solutions,” such as energy-efficiency retrofits and bespoke design.
Build technology and brand moats: Reduce dependence on low-price tactics through in-house R&D and brand building to lift value-add.
This wave of price increases is both a reluctant response to rising costs and a signal of a pivot toward higher-quality growth. Going forward, LED packaging is likely to move beyond price wars into a new stage defined by technology competition and value-based differentiation.
