LED: investment high fever how to maintain the power industry

Production growth of 50%, is 30% - 50% of the gross margin decline. At the same time, LED industry investment is still growing exponentially, more than one hundred billion yuan of new investment projects up to 69.

2011 China's LED industry output value reached 154 billion yuan, an increase of 22%, while output grew by more than 50%. Expected in 2012, driven by lighting products, industry output value is expected to reach 200 billion yuan, an increase of 30%.

What kind of numbers is this?

However, 50% growth did not bring a profit increase of 50%. Since the second half of this year, the upper, middle and lower LED gross margin fell by 30% - 50%. At present, a lot of inventory report figures remain high, chip prices have continued to decline last year and even last year, the accumulated excess investment capacity, has forced many companies to take the price war to make a living. Zhang Xiaofei said.

It is understood that the challenges facing the LED industry is growing, especially in the upstream part of the field (sapphire) investment continued high fever, MOCVD has entered the installation and commissioning stage, the future excess capacity is expected to increase, the middle package on the dilemma, some companies were forced to lower prices to maintain market competitiveness and stable performance, the downstream market is lack of lighting applications reasonable market access mechanism and the mandatory national standard of products caused by uneven quality, the impact of trust on LED lighting terminal owners and consumers to establish.

According to statistics, there are 69 new investments in the first half of 2011 more than 100 million of the LED investment projects, while last year only 74; the upstream epitaxial chip, the first half of the investment amount of 71 billion 794 million yuan; the most popular sapphire project for the first half of the investment plan, signed investment amounting to 21 billion 506 million yuan last year, investment is 94.63%.

LED industry the most upstream wafer production equipment provider GTAT company in the United States 98% of revenues from Asia, most of them share from the hands of China, outstanding orders to hundreds of millions of dollars, and even some customers suddenly ordered hundreds of sapphire furnace. GTAT sapphire equipment and materials department general manager Cheryl Diuguid told reporters that in April this year, GTAT received a $218 million 900 thousand order from a Chinese company sapphire crystal furnace.

Vice President Tongfang Wang Lianghai analysis, the status quo of China's LED chip industry is independent technology industry development ability is insufficient, the initial investment is too large resulting in subsequent investment is weak, independent technology equipment capacity, epitaxy, chip, packaging industry chain with the poor and other issues. Wang Lianghai believes that the fundamental difference between China and Europe and the United States LED upstream industry enterprises is a huge investment, but the lack of enthusiasm accumulation process; the lack of technology innovation ability, the path to market for technology will eventually be difficult. In the face of the market in 2012, Zhang Xiaofei predicted the industry is still dense fog, "most of the investment is still blind, most companies still ignore the patent problem, ignoring the R & D investment, Chinese incandescent disable role on LED lighting is overrated. Zhang Xiaofei believes that with the introduction of industry standards, those companies to seize the market with inferior products, will be a fatal impact.

The industry consensus, must adhere to independent innovation, so that more enterprises understand and participate in the development of global LED industry development rules and norms in the market, through the adjustment of product structure, improve product quality, improve the enterprise layout, so as to ensure the long-term stable growth of the LED industry.