Low end of the high-end LED industry overcapacity

2012 LED industry focus on listed companies, corporate profits are generally suffered cut".

De Ho Runda started with small appliances in the face of the global financial crisis, the company's operating profit was a loss of 60 million yuan. Is in the transition period before the date of Elec-Tech announced the 2012 annual results are not ideal. The report shows that in 2012 the company's operating income and net profit have declined. Last year the company achieved operating income of 2 billion 760 million yuan, down 10.04% over the previous year, operating profit -2432.91 million yuan, down 116.69% over the previous year, attributable to shareholders of listed companies net profit is 162 million yuan, down 58.71% over the previous year.

The dismal performance in a certain extent also reflects a microcosm in LED chip, the upstream industry chain extension enterprises dismal performance.

According to statistics, at present, has released the 2012 annual report and the results of letters LED listed companies, Silan net profit fell, fell 80% expected, the entire industry last year's net profit fell about 30%.

Some researchers believe that overcapacity and price war is the main cause of the two major reasons for the decline in the profits of Listed Companies in the LED industry.

The day before, Shenzhen city in the form of "government gazette" abolished "issued by the LED industry development plan of Shenzhen city (2009-2015) Notice". As the LED industry, Shenzhen enterprises engaged in the LED industry has accounted for nearly half of the country, and as the country's first LED industry planning blueprint was abolished in the industry caused a variety of speculation.

The production of LED in Shenzhen in an interview that Shenzhen is now repeated billion yuan level LED business failures, the entire LED industry has actually appeared overcapacity, worried that the LED industry has become the second photovoltaic industry based, may be an important reason for the government of Shenzhen abolished planning.

Reporters also learned that the LED industry is known as the national energy conservation and environmental protection industry samples, accompanied by national policy support and a variety of subsidies, China's LED industry quickly became the capital's darling". With the rapid development of LED lighting industry, the domestic LED industry capacity expansion, a large number of low-end products overcapacity, but also led to the industry competitiveness is not strong. For a time, bankruptcy, price war, competition for resources, smoke four, and behind this phenomenon is revealed LED industry pattern is changing.

The researchers say, because of blind influx of funds from various quarters, the development of the local governments have also introduced the relevant policies to support the LED industry, subsidies and the intensity is maximum of LED upstream equipment MOCVD, LED from 2009 to 2011 in the upper reaches of the chip appear oversupply, to 2012 has been a serious pile up in excess of requirement point. The investment situation from the upstream epitaxial chip investment growth rate declined from 46% in 2012 to 10% in 2011, while investment in downstream applications of growth in 2011 was 21%, rising to 53% in 2012, this also means that the LED industry investment focus shifted from upstream to downstream.

Is the capital of LED industry seems to stir blind funds once injected to pay the price. According to the Institute of high technology LED industry (GLII) data show that the upstream LED industry oversupply, the operating rate of less than 50%, the entire LED upstream of nearly 50% of the machines are idle.

The industry believes that the export of the LED lighting due to lower demand, thus resulting in the upstream chip field serious overcapacity problems, to resolve this contradiction, we must expand the domestic demand, downstream changes heavily dependent on exports of. In addition, the LED industry to guide the structural change, improve the concentration of low-end areas, while encouraging enterprises to increase the development of high value-added areas and research.

In the industry view, the most important thing is to reduce government subsidies for LED enterprises, and effectively use the market to eliminate LED enterprises. As with many industries, at present, the main external factors of LED industry experience is structured and the surplus, in addition to the market downturn on the outside, government subsidies are not exempt.

Recently, the national development and Reform Commission issued the semiconductor lighting energy saving industry planning, the output value of LED lighting in 2015 from 500 billion yuan in 12th Five-Year plan to be reduced to $450 billion. The development and Reform Commission issued the industrial plan, perhaps the future development of the LED industry to give rational policies.

How the future development of the LED industry, the company believes that LED may based on the overseas market, focus on the development of the domestic market, from the industrial structure, the current is mainly overcapacity in the low-end and high-end, but lack of capacity. Therefore, the strength of the enterprise should be committed to the core technology research and development, accelerate mergers and acquisitions in the low-end field, while entering the high-end field.