Local government to promote the rapid popularization of product prices

Recently, notice of the general office of Fujian provincial government, former provincial information bureau on Forwarding "measures" Fujian province to promote the application of LED lighting products, and strive to clear notice before the end of 2015, the basic realization of public lighting in common use of LED lighting products, the implementation of an aperture under the lighting energy (electricity) more than 50%, each year to reduce carbon dioxide emissions of 400 thousand tons, driven by LED new year the province's industrial output value more than 50 billion yuan.

Specific implementation methods and procedures:

Will be the first on the road and administrative organs, state-owned enterprises and institutions such as finance or state-owned capital investment in the construction of application field of lighting engineering LED lighting products, lighting products using the new LED over the field of lighting engineering, lighting engineering has built the original implementation stages of transformation; drum application excitation and commercial public lighting LED lighting products, accelerate the demonstration the pace of the promotion of non public lighting LED lighting products. By the end of 2013, the 3 County Yunxiao County, Liancheng County, Chengxiang district (District) of the county (District) by the LED lighting transformation in public places or state-owned financial capital investment and construction; by the end of 2014, the province's various districts to have at least 1 county (city, district) to complete the county (city, district) by the LED lighting transformation in public places or state-owned financial capital investment in the construction of the. LED lighting products to promote the effectiveness of the application of the work is particularly significant demonstration counties (cities, districts), given by the provincial finance.

Viewpoint:

Fujian province to promote LED lighting products measures may mean that in addition to other provinces in Guangdong province also began to promote LED. We maintain the previous point of view, that is, the policy is to promote the promotion of LED public lighting demand an important thrust. Fujian Province issued a notice of "measures", means that the Guangdong province last year announced the promotion of LED products policy, adding another important provinces, a new president of the central government an important role in energy conservation and environmental protection, may lead to other provinces continue to follow up.

LED terminal prices began to close to the sweet point. Our industry chain information research found that LED terminal product prices are increasingly close to the balance of consumer acceptance may be large, thus stimulating demand.

From the industry research statistics March LED light bulb prices, the Chinese market to replace 60W incandescent lamp product prices fell to $17.1, the lowest price of the product to replace 40W incandescent lamp has dropped to $4.1. From the international lighting pricing strategy, Samsung and Cree were released priced below 15 and $10 in LED lighting, OSRAM announced that it will launch in June this year to 10 euros (about $13.1) the following products, to stimulate consumer purchase intention, push the market penetration of L LED bulb. We expect the second half of the LED product prices may fall further (mainly driven by the cost reduction driven by chip technology), so that the overall price is increasingly accepted by consumers to accept the point of large-scale.

Chip new production can not be large, the existing large domestic chip to accelerate through the downstream, may make further integration of the upstream eliminated. Observation of the past few years the number of new domestic MOCVD, professional research institutions statistics data show that as of the end of 2012 domestic MOCVD installed capacity has reached more than 900, but affected by the policy of subsidies to withdraw from the competition and the market, 2009-2012 has more than 30% of the LED chip project have quit or use, from the 2012 situation, the domestic new MOCVD installed about 135 Taiwan is much lower than in 2011. In the first half of this year, the mainstream chip manufacturers will not be strong willingness to purchase MOCVD. The use of small chip plant rate is not high, such as Sanan optoelectronics and the Elec-Tech capacity utilization continues to improve. We believe that the integration effect of the chip production side may be further reflected in this year, there will be more small chip manufacturers to accelerate exit. Large chip factory in the way of accelerating through downstream, or through the acquisition of equity investment, or by providing a service program to enhance the cooperative binding effect on the downstream industry chain, such as Elec-Tech for NVC's acquisition after the integration period after most likely for its large chip production can be found in the sea.

To sum up, LED industry demand in this year will be restored by quarter, civil demand may be better in the second half of this year to the end of the year, the industry consolidation effect will be further strengthened. We propose to focus on REFOND, Jufei and de Ho Runda; honglitronic recent changes in strategy are worth tracking.