LED price decline in the case of large and medium packaging enterprises embarrassment

From last year to this year, "Crazy" is almost synonymous with the LED industry. With the release of consumer demand, simple capital, overwhelming advertising, lantern like job hopping has become the most dominant industry this footnote. LED industry is in the Warring States era. In such a volatile environment, each LED enterprises are more or less experienced growing pains.

Is the rapid growth of packaging enterprises have encountered such a bottleneck: the rapid expansion of the industry has encountered a market price war, packaging product prices continued to decline. Faced with this situation, whether or not to expand into a small and medium enterprises in front of a problem.

Rapid expansion shadow

2010 China LED midstream packaging industry output value reached 27 billion yuan. The impact of LED price drop huge, LED package China output in 2011 will reach 35 billion, 2012 of the data will be a strong growth to 55 billion, because next year the global lighting market development will be more objective, and the packaging industry in foreign enterprises will accelerate the transfer to the mainland China.

But such a good performance can not cover up the domestic LED packaging industry is small and scattered in the embarrassing situation, the local data show that about more than 1 thousand LED packaging companies, annual revenues of more than 100 million yuan only more than and 40, most of the business revenue of only 10 million yuan level.

"In the case of low margin, scale is the fundamental business survival package, package is LED in the middle of a machining process, only the scale of production cost can be reduced to a minimum, it can be reduced to maximize profits. Zhang Hongbiao, director of the Institute of high industry LED said so.

Rapid expansion of the industry to bring the risk of price downward, the industry pointed out that raw material prices, but the price of packaged products has been declining, the domestic packaging companies are entering the low homogeneity of the red sea.

The expansion of small and medium enterprises

At present, the embarrassment of packaging enterprises, on the one hand they have to deal with the pressure of falling product prices, profit dilution. According to high tech LED statistics, the average gross profit of most LED packaging companies concentrated in about 10%.

On the other hand, the package is also facing the impact of China's Taiwan LED packaging giant, the cracks survive. Taiwan giant packaging business revenue of more than 1 billion yuan on average, and have all landed on the mainland. 2010 China LED packaging output value of 27 billion yuan, but most of the city accounted for foreign companies, especially Taiwan enterprises control.

In the face of difficulties, some companies can use the power of capital to grow, and the implementation of integration. Since 2010, nationstar, Lehman photoelectric, honglitronic, REFOND have opened up the financing channel, Mu Linsen would have passed. Without the capital background of SMEs, their way out?

Product prices decline, if you can not control the cost of the enterprise will be difficult, Zhang Hongbiao pointed out that the scale will significantly reduce the cost, whether to expand the production of small and medium enterprises to become a difficult choice. But at the same time, capital flow is a big problem that SMEs can not be ignored, once the expansion of production, in the case of the national financial tightening again and again, small and medium enterprises capital chain is bound to once again face enormous pressure and challenges.