Explore the LED lighting industry password

China's LED lighting industry is facing dual pressures of product price decline and oversupply. In recent years, the annual market price will have a decline of 20%~30%. Industry is facing a strong reshuffle.

Dongguan KingSun Au Optronics Co Board Secretary Wei Li said, LED lighting industry last year has begun to price. The market can not accommodate so many enterprises. Some companies are eliminated is inevitable. Market cake is so big, but still continue to have new businesses. We are optimistic about the prospects of this industry, whether strong or weak, are entering.

Carle, chairman and general manager of Qingdao Optoelectronic Technology Co., Ltd., said the, LED industry market competition is fierce. Fierce competition in the industry and technology maturity, is the cause of price decline.

Code of life and death

Chinese investment used to see the situation is the rush on like a swarm of hornets, Zhang Lianxin has been peer opened, and there have been peer failures. Qingdao Road, Zhuzhou, there are only five or six companies on the size of LED, last year there was a peer closed.

Wei Li said, LED lighting industry is currently facing overcapacity, the country has thousands of such enterprises. The newly established small and medium enterprises, survival will be more difficult. Because the LED market is characterized by engineering oriented, not to the stage of independent consumption. This means that the ability to advance funds, the ability to undertake the operation of the project, the strength of the brand, these conditions for small and medium enterprises, are unfavorable.

The industry LED lighting industry is divided into three parts in the middle and lower reaches of the main chip to do upstream, the middle of the main package, the downstream photovoltaic applications. Zhang Lianxin said, is currently located in the middle reaches of the industrial chain packaging enterprises are most likely to collapse. Because the middle reaches of the relatively easy to enter, the lowest technical content, so the relative surplus. Can not achieve large-scale management, it will be closed even losses. There are several hundred million dollars or even hundreds of thousands of small capital can engage in a workshop type factory. But to master the core technology, and can withstand the test of large projects, it is a long time to focus on this industry and become the industry stronger, there are a lot of precipitation and accumulation of enterprise project. This enterprise is also the last to survive. Wei Li said.

Currently on the LED lighting industry chain, the upstream chip and midstream packaging are relatively surplus. These enterprises, large upfront investment, national policy subsidies are relatively large, many companies valued state subsidies on large investment, investment, downstream applications market is not large enough to burst, upstream is difficult to recover the huge investment costs.

Wei Li said that in the middle and upper reaches of the market did not get much time, product prices have begun to decline significantly. The whole industry chain to develop, it is necessary to do the overall price down. LED downstream application market is the biggest threshold price, when the technology is mature enough, downstream prices down, forced upstream and downstream enterprises to make profits. However, if the upstream price does not float, you can not get orders, profit margins will be lower and lower. Downstream in the market scale is also trying to expand, in order to achieve economies of scale, small profits but quick turnover, while the downstream price pressure is also constantly to the upstream transport. The whole industry chain is complementary.

KingSun as a downstream LED production plant, the first profit rate in 40%~50%, the profit rate remained at around 30%.

Industry reshuffle and self downsizing continued. Last March, KingSun sold Shandong Weifang subsidiary company. Because of the continuous loss of the holding subsidiary, has formed a drag on the performance of listed companies. Wei Li said, limited market space, lack of resources for the project, for two or three consecutive years of micro losses. Because it is a holding company, is looking forward to have positive contribution, but the partnership business is not good, do meaningful, KingSun will opt out. "

It is reported that KingSun sold the stake to a boss in Linyi. Now Jin Yuan and Qinshang cooperation as customers paid services. In the LED industry, there are a number of enterprises closed down every year. The same input and scale of operations, there is a large-scale market support to support the living, otherwise it can only be closed. Wei Li said, the final elimination of the enterprise, is the lack of operating funds, can not get big projects, no sales revenue, and then form a vicious circle of enterprises. "

Next PV?

There are also people in the industry worried that the LED lighting industry may become the next PV industry.

Wei Li said, LED industry can not say the same as the photovoltaic industry, because the photovoltaic industry investment is huge, there is pollution, the application of the market itself is not like LED huge future space. The problem with the LED market is that everyone is bullish and flooding in too much. The result of the influx, resulting in market saturation and excess. Besides, there are no other negative things. Profit margins and prices are falling faster. But the country's support, as always, has not changed.

UBS Securities analyst Mao Ping said that in the background of macroeconomic recovery, the overall economy of LED industry chain is expected to rebound; with the technical level of domestic enterprises to upgrade, expected future from lighting products to chips are expected to tilt to the domestic enterprises, the whole industry is good.

In Zhang Lianxin seems, LED industry is no problem in the sunrise industry, but the industry has gone through 10 years of free development, the state had to enter the LED business, there is no limit