The guidance and inclination of government policies is often an indispensable factor in the development of an industry. The same is true for the LED industry.
Su Bo, deputy minister of the Ministry of Industry and Information Technology, said at the third Green Industry Conference held recently that it will accelerate the development of energy-saving and environmental protection industries from five aspects, promote the development of green industry, and promote the industrialization of semiconductor lighting as an important part of it.
At the 10th China International Semiconductor Lighting Forum, which opened earlier this month, Vice Minister of Science and Technology Cao Jianlin said that China has developed rapidly in the field of semiconductor lighting in the past ten years and has become one of the centers of global semiconductor lighting research and development and production.
Worry under the glare data
The LED Industry Research Institute of the High-Tech Industrial Research Institute is a research institute focusing on LED industry economics and market research and consulting. According to the report issued by the High-tech LED Industry Research Institute, the overall output value of the LED industry is expected to increase by about 20% in the fourth quarter of this year. The total industry scale of the year exceeded 260 billion yuan, a year-on-year increase of 28%. The annual output of LED indoor lighting will increase by 110% year-on-year. It is expected that next year, although the LED indoor lighting output base will increase year by year, the output value growth rate will remain at around 60%.
Behind the rapid development, the difficulty of quality improvement is still a major problem in the industry. Xiao Guowei, Managing Director of Jingke Electronics (Guangzhou) Co., Ltd. said that the production of LED epitaxy and chips in China has a certain scale, which is reflected in the installed capacity, capacity, and scale of LED chip manufacturing. "But there is still a certain technological gap between the quality and technical level of the products and the international manufacturers. How to achieve qualitative improvement in the future development, not just the accumulation of quantity, will be one of the most developments in our domestic LED chip field. The core issue."
In addition, behind a series of beautiful data, the problem of not increasing profits in the industry is still outstanding. Zhang Xiaofei, chairman of Gaogong LED, said that although there were a lot of orders in 2013 and revenues increased, the price war was fierce and corporate profits were getting thinner.
The data shows that the 20 listed companies in the Shenwan LED industry achieved a total operating income of 14.195 billion yuan in the first three quarters of this year, up 20% from the 11.81 billion yuan in the first three quarters of last year; the net profit attributable to shareholders of the parent company was 1.687 billion yuan. Compared with the 1.59 billion yuan in the first three quarters of last year, it increased by 6%, and the profit growth rate was significantly lower than the revenue growth rate.
In this regard, the industry generally believes that price wars, increased period expenses and reduced government subsidies are important reasons for LED companies to increase revenues.
This is the stage of not making money
For the real situation of competition in the industry, Wang Junbo, deputy general manager of Jingyuan Baochen Optoelectronics (Shenzhen) Co., Ltd. bluntly said, “At present, the overcapacity of LED chips is a foregone conclusion, and the price trend that has been falling, the chip industry has entered a small profit and even It is an era of no profit."
In this regard, Wang Junbo is very calm, he said that when the industry slowly starts from the outbreak to the maturity, the number of competitors will be less, because some people will be eliminated in the middle of the killing process. It must be meager, and only when the industry develops to maturity will there be a relatively stable profit.
In the past two years, the LED industry has had a serious overcapacity, and the tide of bankruptcy has frequently hit. At the beginning of this year, with the opening of the LED lighting market, the entire industry chain is booming. Despite the surge in orders from companies, the fierce price war has run through the entire industry chain.
For the upstream industry, in 2013, domestic chip makers reduced the price of chips to between 20% and 30% in the past. “This data can only be completed by Chinese companies.†Industry insiders smiled bitterly.
For the midstream package manufacturers, despite the rapid start of the downstream LED lighting market this year, the price competition between the peers is still very fierce. “The downstream manufacturers don’t have any loyalty at all, so there’s a lot of things to do to grab customers on the price.†One package maker said it was helpless.
Downstream LED lighting applications are equally competitive. Due to the government's energy-saving and emission-reduction tasks and the launch of the overseas market in Europe, especially in Europe, the competition of domestic LED lighting manufacturers in the field of engineering lighting and indoor lighting has reached a fever pitch. At the same time, due to the low technical threshold, some “outside†companies have also entered this In the market, new entrants often seize the market with low-cost strategies.
Industrial integration is imperative
Since the second quarter of 2013, the LED industry in the downturn has seen a good momentum of recovery, and companies have taken the strategy to counterattack, and the industrial integration plan has once again been incorporated into the development plans of some large factories. In the view of Jin Yunchuan, director of Chongqing Silian Optoelectronics Technology Co., Ltd., the situation of the LED lighting market in 2013 has exceeded the average of previous years, and the explosive growth will continue in the next three to five years.
The data shows that as of 2013, there are about 51 domestic LED upstream enterprises, 1750 mid-stream packaging enterprises, and 15,000 downstream application enterprises. In terms of industry concentration, there is no domestic manufacturer's share of more than 5%.
Zhang Xiaofei said that there will be more industry consolidation from next year, the number of enterprises turning traditional LED lighting to LED lighting will reach the peak, the total number of LED industry enterprises will reach the peak, and the market competition will become more intense: upstream, most local enterprises Will die, the final survival rate of local chip manufacturers is expected to be around 30%; in the midstream, enterprises can only survive by forming strategic alliances with the downstream, some enterprises will become large-scale professional manufacturers, and other more than 1000 LED packaging enterprises will be eliminated; downstream Application companies will also face a major reshuffle. It is expected that LED lighting companies will die more than 50% in the next five years, and traditional lighting companies will die more than 30%.
In fact, some enterprises have started the integration strategy of enterprises this year. Dehao Runda acquired NVC Lighting for vertical integration of the upstream and downstream of the industry chain; Sanan Optoelectronics plans to acquire Taiwan's Yuyuan Optoelectronics and the US lumens, both horizontally and vertically. Recently, Liard announced the acquisition of Jinda Lighting, hoping to use the latter's technological advantages, project experience, channel resources and customer resources to accelerate the expansion of the company's LED lighting business segment.
Find the right support policy
From the perspective of the industry's own development, the current second-generation LED products produced in China are not advanced in technology. Many LED chips used by enterprises are mainly imported, while some countries are already studying third-generation LEDs.
From the perspective of the government's attitude towards the industry, over 100 cities across the country have listed LED as the priority of development. Under the circumstances of little understanding of the industry, research is not deep, and expectations are too high, the ultra-conventional development measures are essentially blindly gambling. The meaning of a hand. And a large amount of financial subsidies will inevitably lead to disorderly competition in the LED market.
In this regard, Li Chaoqi, director of the former political party committee of Jiangmen City, Guangdong Province, pointed out that if subsidies are mainly invested in the upstream of the industrial chain, it will cause a surge in investment and overcapacity; if subsidies are placed in the consumption chain of lighting products, although the market demand can be expanded, the industry will be stimulated. Development, but can not help companies enhance market competitiveness.
Li Chaoqi believes that the government's support for the LED industry must be focused on helping companies form core competitiveness. On the one hand, it is necessary to organize basic research on new semiconductor materials and their performance improvement, and create preconditions for enterprises to carry out technological innovation, improve and stabilize product quality and reduce costs.
On the other hand, it is necessary to create a good market environment for enterprises. For example, Guangdong Province has already decided to popularize LED public lighting at the end of 2014, but public lighting is only part of all lighting, and home lighting is the largest market space for industrial development. In order to promote the large-scale entry of LED lighting products into the home, it is necessary to reduce the cost including power-saving factors to a level close to that of traditional lighting products, and realize the "popularization" of LED product prices.
"In short, if an industry survives and develops mainly by government subsidies, its endogenous growth momentum is definitely insufficient, its competitiveness is bound to be weak, and its development space will be limited." Li Chaoqi believes that cultivating and enhancing adaptation and even guiding market demand Capacity, this should be the key to the healthy growth and sustainable development of the LED industry in the future.
Su Bo, deputy minister of the Ministry of Industry and Information Technology, said at the third Green Industry Conference held recently that it will accelerate the development of energy-saving and environmental protection industries from five aspects, promote the development of green industry, and promote the industrialization of semiconductor lighting as an important part of it.
At the 10th China International Semiconductor Lighting Forum, which opened earlier this month, Vice Minister of Science and Technology Cao Jianlin said that China has developed rapidly in the field of semiconductor lighting in the past ten years and has become one of the centers of global semiconductor lighting research and development and production.
Worry under the glare data
The LED Industry Research Institute of the High-Tech Industrial Research Institute is a research institute focusing on LED industry economics and market research and consulting. According to the report issued by the High-tech LED Industry Research Institute, the overall output value of the LED industry is expected to increase by about 20% in the fourth quarter of this year. The total industry scale of the year exceeded 260 billion yuan, a year-on-year increase of 28%. The annual output of LED indoor lighting will increase by 110% year-on-year. It is expected that next year, although the LED indoor lighting output base will increase year by year, the output value growth rate will remain at around 60%.
Behind the rapid development, the difficulty of quality improvement is still a major problem in the industry. Xiao Guowei, Managing Director of Jingke Electronics (Guangzhou) Co., Ltd. said that the production of LED epitaxy and chips in China has a certain scale, which is reflected in the installed capacity, capacity, and scale of LED chip manufacturing. "But there is still a certain technological gap between the quality and technical level of the products and the international manufacturers. How to achieve qualitative improvement in the future development, not just the accumulation of quantity, will be one of the most developments in our domestic LED chip field. The core issue."
In addition, behind a series of beautiful data, the problem of not increasing profits in the industry is still outstanding. Zhang Xiaofei, chairman of Gaogong LED, said that although there were a lot of orders in 2013 and revenues increased, the price war was fierce and corporate profits were getting thinner.
The data shows that the 20 listed companies in the Shenwan LED industry achieved a total operating income of 14.195 billion yuan in the first three quarters of this year, up 20% from the 11.81 billion yuan in the first three quarters of last year; the net profit attributable to shareholders of the parent company was 1.687 billion yuan. Compared with the 1.59 billion yuan in the first three quarters of last year, it increased by 6%, and the profit growth rate was significantly lower than the revenue growth rate.
In this regard, the industry generally believes that price wars, increased period expenses and reduced government subsidies are important reasons for LED companies to increase revenues.
This is the stage of not making money
For the real situation of competition in the industry, Wang Junbo, deputy general manager of Jingyuan Baochen Optoelectronics (Shenzhen) Co., Ltd. bluntly said, “At present, the overcapacity of LED chips is a foregone conclusion, and the price trend that has been falling, the chip industry has entered a small profit and even It is an era of no profit."
In this regard, Wang Junbo is very calm, he said that when the industry slowly starts from the outbreak to the maturity, the number of competitors will be less, because some people will be eliminated in the middle of the killing process. It must be meager, and only when the industry develops to maturity will there be a relatively stable profit.
In the past two years, the LED industry has had a serious overcapacity, and the tide of bankruptcy has frequently hit. At the beginning of this year, with the opening of the LED lighting market, the entire industry chain is booming. Despite the surge in orders from companies, the fierce price war has run through the entire industry chain.
For the upstream industry, in 2013, domestic chip makers reduced the price of chips to between 20% and 30% in the past. “This data can only be completed by Chinese companies.†Industry insiders smiled bitterly.
For the midstream package manufacturers, despite the rapid start of the downstream LED lighting market this year, the price competition between the peers is still very fierce. “The downstream manufacturers don’t have any loyalty at all, so there’s a lot of things to do to grab customers on the price.†One package maker said it was helpless.
Downstream LED lighting applications are equally competitive. Due to the government's energy-saving and emission-reduction tasks and the launch of the overseas market in Europe, especially in Europe, the competition of domestic LED lighting manufacturers in the field of engineering lighting and indoor lighting has reached a fever pitch. At the same time, due to the low technical threshold, some “outside†companies have also entered this In the market, new entrants often seize the market with low-cost strategies.
Industrial integration is imperative
Since the second quarter of 2013, the LED industry in the downturn has seen a good momentum of recovery, and companies have taken the strategy to counterattack, and the industrial integration plan has once again been incorporated into the development plans of some large factories. In the view of Jin Yunchuan, director of Chongqing Silian Optoelectronics Technology Co., Ltd., the situation of the LED lighting market in 2013 has exceeded the average of previous years, and the explosive growth will continue in the next three to five years.
The data shows that as of 2013, there are about 51 domestic LED upstream enterprises, 1750 mid-stream packaging enterprises, and 15,000 downstream application enterprises. In terms of industry concentration, there is no domestic manufacturer's share of more than 5%.
Zhang Xiaofei said that there will be more industry consolidation from next year, the number of enterprises turning traditional LED lighting to LED lighting will reach the peak, the total number of LED industry enterprises will reach the peak, and the market competition will become more intense: upstream, most local enterprises Will die, the final survival rate of local chip manufacturers is expected to be around 30%; in the midstream, enterprises can only survive by forming strategic alliances with the downstream, some enterprises will become large-scale professional manufacturers, and other more than 1000 LED packaging enterprises will be eliminated; downstream Application companies will also face a major reshuffle. It is expected that LED lighting companies will die more than 50% in the next five years, and traditional lighting companies will die more than 30%.
In fact, some enterprises have started the integration strategy of enterprises this year. Dehao Runda acquired NVC Lighting for vertical integration of the upstream and downstream of the industry chain; Sanan Optoelectronics plans to acquire Taiwan's Yuyuan Optoelectronics and the US lumens, both horizontally and vertically. Recently, Liard announced the acquisition of Jinda Lighting, hoping to use the latter's technological advantages, project experience, channel resources and customer resources to accelerate the expansion of the company's LED lighting business segment.
Find the right support policy
From the perspective of the industry's own development, the current second-generation LED products produced in China are not advanced in technology. Many LED chips used by enterprises are mainly imported, while some countries are already studying third-generation LEDs.
From the perspective of the government's attitude towards the industry, over 100 cities across the country have listed LED as the priority of development. Under the circumstances of little understanding of the industry, research is not deep, and expectations are too high, the ultra-conventional development measures are essentially blindly gambling. The meaning of a hand. And a large amount of financial subsidies will inevitably lead to disorderly competition in the LED market.
In this regard, Li Chaoqi, director of the former political party committee of Jiangmen City, Guangdong Province, pointed out that if subsidies are mainly invested in the upstream of the industrial chain, it will cause a surge in investment and overcapacity; if subsidies are placed in the consumption chain of lighting products, although the market demand can be expanded, the industry will be stimulated. Development, but can not help companies enhance market competitiveness.
Li Chaoqi believes that the government's support for the LED industry must be focused on helping companies form core competitiveness. On the one hand, it is necessary to organize basic research on new semiconductor materials and their performance improvement, and create preconditions for enterprises to carry out technological innovation, improve and stabilize product quality and reduce costs.
On the other hand, it is necessary to create a good market environment for enterprises. For example, Guangdong Province has already decided to popularize LED public lighting at the end of 2014, but public lighting is only part of all lighting, and home lighting is the largest market space for industrial development. In order to promote the large-scale entry of LED lighting products into the home, it is necessary to reduce the cost including power-saving factors to a level close to that of traditional lighting products, and realize the "popularization" of LED product prices.
"In short, if an industry survives and develops mainly by government subsidies, its endogenous growth momentum is definitely insufficient, its competitiveness is bound to be weak, and its development space will be limited." Li Chaoqi believes that cultivating and enhancing adaptation and even guiding market demand Capacity, this should be the key to the healthy growth and sustainable development of the LED industry in the future.
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