Overcapacity led to the decline in LED quality problems or will emerge

As one of the strategic emerging industries, LED industry in recent years led to an upsurge of investment in the country, and has become the darling of the capital market. However, since 2012, for the lamp felt for firewood?? "praised the embarrassing situation, the recent 2012 earnings data released by companies is not satisfactory.

Compared with 2011, a number of LED companies in 2012, both revenue and net profit have been a significant decline. Such as the well-known LED chip companies Elec-Tech, 2012 revenue of 2 billion 824 million yuan, down 8%; net profit of 168 million yuan, down 57%. Silan 2012 revenue fell 12.74%, net profit fell 88.07%. National Star photoelectric 2012 revenue fell 11.87%, net profit fell by 66.45%. For the reasons for the decline in performance, the company gives the explanation is: due to the impact of increased competition in the LED industry, the company's product prices fell sharply, and thus squeezed profit margins.

Structural overcapacity triggered price decline

2012 China LED industry growth rate of 34%, indicating that the market growth rate is still maintained at a high level. But the entire LED industry capacity expansion rate is much faster than the rate of growth in the scale of the fierce competition in the price of the entire LED industry emitting bursts of cold".

2012 China LED chip average price fell by 32%, some products such as the display with a small power LED blue chip average price fell more than 50%. In 2012, China's LED chip industry showed a profit and loss balance or even losses, which ultimately led to the loss of the majority of enterprises.

Packaging industry in the middle reaches of the LED industry chain, in 2012 China's LED lighting white light packaging devices average price decline of more than 30%, LED packaging industry has gone through the era of high margin. In the downstream application industry, 2012 Chinese LED fluorescent lamp, LED bulb lamp, LED panel lights, LED lights and indoor lighting products, the average price fell by 23%.

Quality problems or will emerge

The blind expansion of existing enterprises and small and medium enterprises continue to enter without any technical background, the industry will be dragged into the quagmire. The low quality products will make the industry suffered a crisis of confidence. But it should be noted that, although the LED industry and other crises have a lot in common, but there are different factors. Unlike other industries, demand has been hit by the macroeconomic downturn, due to the decline in demand led to overcapacity, which led to the crisis in the industry.

LED industry macroeconomic demand has not been a serious blow, due to the recent state encourages investment in infrastructure and energy saving and environmental protection, the city have introduced a city investment plan will be more or less related to the transformation of street lighting, landscape lighting and other facilities, the demand for LED devices has a rising trend. The LED industry overcapacity for a long time, mainly due to the local government to encourage the system caused by the last year, even if there is no economic crisis, the industry reshuffle is an inevitable trend. The current round of economic downturn is only accelerated the process, the entire industry is not a bad thing. The future of the industry in the quality of the casting of the barriers to entry, the entire industry will form a monopoly advantage.