A study on the vertical integration model in the cold market environment

2010 began, there are a number of domestic enterprises in the LED industry chain in different sectors began to continue to invest in the layout of the whole industry chain. At that time, who can vertically integrate the LED industry, who is the big winner. However, it is an indisputable fact that the vertical integration mode may cause the profit to be affected by the downstream demand. The biggest risk is that this model, if the downstream demand slowdown, may lead to the company's cost can not be assigned to the upstream, the cost rate may rise. Unfortunately, due to the lower end of the lower reaches of the lighting applications market demand is expected to lower the impact of many of the vertical integration stage of the domestic LED companies are experiencing the most difficult moments in history. "It's just the eve of vertical integration. For the current situation of the development of the domestic LED lighting, Shandong tide Huaguang chairman Zheng Tiemin told reporters on behalf of the high tech LED. The high tech LED CEO Dr. Zhang Xiaofei has also publicly said that the current domestic LED companies have not yet qualified for vertical integration. The so-called qualifications reflected in many aspects, in the technology and market is not mature, do the whole industry chain is to drive a duck onto a perch. Upstream brake "now you do package and application, you look for packaging and application business to do business, people will buy your account? If you do is closed, the upper and middle reaches must be able to match the capacity, if it does not match the trouble. "Dongguan KingSun chairman Li Xuliang of the current domestic part of the extension project of embarrassment to reporters. According to high tech LED reporter learned that, due to the downstream market demand can not be opened in accordance with the previous investment is expected to open, and now almost all domestic epitaxial projects are facing the problem of chip inventory backlog. The most let the part of the vertical integration of the industry's business is the embarrassment of their own upstream and downstream capacity matching and competition with downstream customers. As the largest manufacturer of LED epitaxial optoelectronics as an example, as of November last year, the company a total of about 80 MOCVD in the start state. According to the three optical three quarter results, the company's current chip inventory has reached 900 million yuan. According to the high LED reporter confirmed from the relevant sources, from the first half of last year, Yangzhou's MOCVD has been arranged in Elec-Tech delayed production. Purely rely on the export of epitaxial chip manufacturers day like this, for those who are the layout of the whole industry chain integration of enterprises, I am afraid the difficulties will be greater. In the current demand and output is extremely unequal situation, enterprises do vertical integration, buy a large number of MOCVD devices, is tantamount to drilling. Recently, high LED reporter learned from many different sources, industrial production base in Yangzhou and in a state of suspension because has not been able to find a partner. The base of the Jiangmen and therefore the personnel changes and the impact of low product yield, once the company has been released epitaxial chip production in semi shutdown state. When a reporter called the relevant person in charge of the company, the other side is not to disclose the answer given. To the neon lighting started from the beginning of 2003, into the LED package, and then to 2008 to enter the LED upstream epitaxial chip manufacturing, is the industry known as the first vertical integration in the LED lighting industry chain factory, taiwan. Neoneon responsible person told the reporter that, when cross foot LED chips, mainly Taiwan chip is not imported into the mainland, the mainland LED chip technology is not yet mature. Vertical integration of the company to ensure the source of raw materials and reduce costs. According to the argument, homemade chips can save 40% to 50% of the cost. However, over the past few years, the domestic LED chip market has long been the world's largest melee. According to the LED Institute of Industrial Engineering (GLII) statistics show that as of November 2011, the domestic market size of LED power white chip prices fell nearly two years up to 70.71%. According to the first half of 2011 earnings Neoneon released, as of September 30th, the first half of industrial revenue of HK $788 million, an increase of 7.9%, loss of HK $102 million. Kerry said in the earnings report, due to the economic environment becomes poor, leading to customer order lines generally shrinking. The excessive investment in domestic LED, resulting in an oversupply of LED capacity, the rapid decline in market prices. According to the reporter, the other one across the country to the upper reaches of the packaging enterprises star optoelectronics, has been put into operation MOCVD. But the source told reporters: "the current state of the star from the outside of the chip to buy the price even lower than the price of their own production. It was a slap in the face. For discontinued, there are upstream enterprises, said it was quite helpless and painful choice. MOCVD furnace every stop day, not only need more than 10000 yuan consumption. What's more, when the furnace is restarted, it needs to have a half a year. After the commissioning period, the customer has a year of probation on the chip. So calculated, the time consumed by the enterprise and financial costs are enormous. A person engaged in the middle of the packaging of the company responsible person admitted to reporters, upstream chip manufacturer's production scale is greater than demand, we will not be so many orders. "Package breakthrough in December 5, 2011, honglitronic packaging listed companies invested 260 million established LED product application and development base in Huadu, responsible for the subsidiary LEDIA, directed at LED lighting applications. This is another honglitronic layout in LED lighting application link, before the company has passed several joint ventures (Guangzhou Forda Signal Equipment Co. Ltd., Foshan kserp Parklane photoelectric Co. Ltd.) in LED lighting applications. At the same time, in June last year, the country's other listed companies listed in the National Star Optoelectronics