PHILPS investment Chengdu LED division mode or stir?

Daily ten pm, known as the "West First Street" Chengdu Jinli Street store who has been the end of the day's business, but the charm of the ancient landscape still attracts many tourists stop.

This much thanks to Chengdu city everywhere LED landscape lighting, despite its energy-saving and other advantages is often the high cost of the "cover", but this does not seem to affect the LED in this city such as Chengdu West market.

The latest example comes from PHILPS, which announced in December 15th, plans a total investment of more than 25 million euros from 2015, in the Chengdu high tech Zone to invest in the construction of professional LED lighting project.

At the beginning of this year, PHILPS has just announced the addition of Holland and the United States in China, another local market strategic planning. As one of the important implementation of this strategy, PHILPS announced in June this year, the establishment of its second regional headquarters in Chengdu, China Hi tech development zone.

"We will be more closer to the local business model, better service in the Midwest, and in the Chinese market to achieve greater success. PHILPS executive vice president, Greater China CEO Kong Xianghui said.

But for PHILPS, to achieve greater success may not be an easy thing. In fact, because the cost of LED is still too high, in China is more dependent on local government to digest the municipal works. Some skeptics point out that, in cooperation with local governments in the project, foreign companies do not seem to have the advantage of local enterprises.

PHILPS lighting division, Greater China President Tommy Leong is not willing to directly respond to this question, but he admits that "China government is actively promoting LED lighting, the local government plays a very important role, which requires us and city policy makers are more interactive. "

Second regional headquarters in Chengdu

For the downturn in the PHILPS, China is clearly a market can not be missed.

Headquartered in Holland, PHILPS's business covers lighting, healthcare and quality of life. In these three business units, PHILPS started lighting business accounted for about 40% of its overall sales, of which, there are more than 10% of the contribution from china.

2010, PHILPS's overall performance in China grew by more than 20%, more than Germany to become the world's largest market in PHILPS, second only to the u.s.. In China's business, the rapid growth of LED street lighting.

Unlike some European countries, the Chinese government to the entire LED industry is very strong support for the development of the industry has played a significant role in promoting. Moreover, the development of urbanization in China has accelerated the development of LED outdoor lighting industry. "Tommy Leong said.

At the beginning of November, the national development and Reform Commission, the Ministry of Commerce, the General Administration of customs and the State Administration for Industry and commerce, the State Quality Inspection Administration jointly issued a "gradual ban on the import and sale of ordinary incandescent lighting notice", from October 1, 2012, according to the size of the power gradually ban the import and sale of incandescent lamps for general lighting, is widely believed to be a good for the development of LED industry.

China's LED market is expected to achieve a major outbreak in 2012, the market size will grow from $2 billion 800 million in 2011 to $8 billion, an increase of 185%. By the second half of 2012 China's LED lighting penetration will exceed 30%, reaching about 31%.

For the downturn in the PHILPS, which is clearly a market can not be missed. In fact, PHILPS has just released three quarter earnings reported its third quarter net profit from 524 million euros last year fell to 76 million euros, up sharply down 85%; revenue from 5 billion 460 million euros last year fell to 5 billion 394 million euros.

Kong Xianghui introduction, PHILPS to build the second regional headquarters covers an area of 35 thousand square meters, the main production of PHILPS brand outdoor and indoor LED lamps, and both product industrialization, customization and other functions. In addition, the project also includes a LED lighting application center, but also as a customer experience center. "

Will agitate the LED division mode?

We will establish a 'end to end' business capability and business model in china. "

China LED market prospects for the future, not only PHILPS. According to the China Institute of lighting data, there are more than 4000 LED companies in china. One of the 3000 companies for the assembly and application of the main industry, 800-1000 engaged in packaging, and upstream chip manufacturers have about 100.

As the first in the Chinese market lighting manufacturers, PHILPS in China to develop the advantages of the LED industry seems equally obvious.

In fact, the current chip market almost by PHILPS, Nichia, CREE and other global giants monopoly. In the entire LED industry, the upstream epitaxial chip and chip manufacturers to earn 70% of the entire industry chain profit. Chinese companies are more concentrated in the middle reaches of the LED package is only earn about 20% of the profits. In addition, the lowest end of the industrial chain in the application of a simple terminal lighting production and processing enterprises is only 10% of the profits.

However, according to the Institute of LED Institute of industrial statistics, even if the competition is not so intense LED chips, the average price of 1-7 months this year, the average price of 25%.

"Fierce competition is not only in the LED industry, as far as we know in the traditional lighting industry, China has about 5000 enterprises