"The survival of the road closures struck LED enterprise change danger into safety.

It is said that in Taiwan Qili photoelectric industry benefits has been good, there are two industrial Chimei Innolux and rich dad when the shareholders, but now it came out of business news, this topic once again to LED business failures in the teeth of the storm. It is said that the collapse of the mainland LED companies like infectious diseases, and now spread to Taiwan...... Whether you say it's a guess, or a legend, it's a fact. What is the reason for the death of these enterprises from strong trend, as also did not fall of the enterprise, and how to deal with "is probably one of my" closures?

Qili was the excellent student of Taiwan LED photovoltaic industry, and Innolux and Chi Mei Industrial two rich dad when shareholders, but now it came out. The main reason is because, with strong capital, high subsidies policy support, let LED industry practitioners to price competition, but also, because of the excessive competition triggered closures, now the situation has spread to Taiwan.

For the mainland LED small and medium enterprises, the state subsidies, government procurement and its basic missed. Matthew effect in the national subsidy policy has a vivid expression of large enterprises to use financial subsidies to profitability, and even rub, can cheat, SMEs often missed. In the wave of popularity of LED outdoor lighting, public lighting the government procurement orders of enterprises is a listed company, a small company is a cup of a thick soup.

One reason: rotten goods flooded the market

Prior to the collapse of the old man in the town mainly to do the low-end products, and this product is known in the industry as rotten goods, characterized by cheap, quality is not guaranteed.

Foshan, an industry source said, in Zhongshan, more than 3 will be able to buy a ball bubble lamp, and in some places this type of light may sell dozens or even hundreds of dollars. On the one hand to do low prices, on the other hand, but also to make money, so that some enterprises in the quality of products on the hands and feet. The hands and feet of things simply not qualified, can not be sold out, but in the white hot competition, you do not do others.

Earlier this year, the Guangdong Provincial Quality Supervision Bureau announced the 51 batches of LED street lamps and light source controller sampling results, of which 20 batches of substandard, substandard product discovery rate of up to 39.2%. This means that a large number of substandard LED products are flooding the market.

Reason two: meager profits too difficult financing

Excess capacity caused by vicious price war between enterprises, so that the LED industry downstream product prices continue to decline, profits naturally diluted. At present, the gross margin of the LED industry is only about 20%, while net profit of less than 5%.

In addition to the profit space is compressed, the financing problem has been difficult for SMEs to climb the mountain".

According to industry sources, the existence of a series of bonds within the LED industry issues. Many enterprises and suppliers, by letter to ensure the turnover of enterprise funds. According to the general rules of the industry, many people choose to travel to suppliers of raw materials on credit, while allowing the downstream customers to maintain long-term orders in arrears. In this cycle of arrears on the chain, once the company's sales market instability or profit margins decline, the product quality can not meet customer requirements, the chain will break the arrears.

SME financing is an indisputable fact. Rising external costs to boost demand for funds, in the case of tight money, SMEs access to credit resources are limited, low financing needs satisfaction. Coupled with the lack of effective collateral for SMEs, the difficulty of loans will increase. Even if the loan to money, interest rates and mortgage loan interest rates are too high, but also to allow SMEs to bear.

Three reasons: excess capacity of the fittest

At present, the LED market has been saturated, LED industry quick success and instant benefit, excess capacity, the phenomenon of vicious competition is common, all kinds of enterprises cohabitation, we are adhering to, even at a loss to production. However, in such market conditions, LED industry has again become the capital in the eyes of the meat and potatoes. Xishan, Furi Electronics and BYD have entered the LED.

LED industry contrarian expansion of the industry, as well as irrelevant enterprises to enter the LED industry, which is bound to further exacerbate overcapacity, further deterioration of market competition. Excessive investment makes the LED industry oversupply, many enterprises are in the lower middle and lower technical barriers. The future of LED companies will face brutal survival of the fittest. Only a small number of enterprises will gradually grow, and more enterprises will face the fate of being eliminated.

From this level, blindly follow the trend, expanding production capacity, not only can not make the business bigger, but the smaller the smaller, until it was mercilessly eliminated. So, not because of the big.

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