LED companies survive the fittest competition

After experiencing investment booms and price cuts, the domestic LED industry is entering a meager era. In the past few years of huge investment, while the scale of the industry has increased, but also brought about excess capacity, LED companies face fierce competition in the survival of the fittest. Many people in the industry believe that the industry may face a cold wave in the short term, and shuffling is inevitable.

The output value will reach 205.9 billion yuan this year

Although the tide of price cuts has already come, the investment in the LED industry has continued unabated. According to a report released recently by Gaogong LED, it is estimated that by the end of 2012, the total output value of the domestic LED industry will reach 205.9 billion yuan.

“From the overall situation this year, the status of the upstream sector has actually improved. This is mainly due to the increase in the proportion of investment in downstream applications in the second and third quarter, a large part of which comes from traditional lighting companies. LED industry transfer investment." Zhang Xiaofei, CEO of Gaogong LED said. He said that from the perspective of the entire upstream investment, the growth rate of the investment in epitaxial wafers dropped from 46% last year to 10% this year, while the investment growth in downstream applications has increased from 21% last year to 53% this year, so LED The investment focus of the industry has shifted from upstream to downstream.

Zhang Xiaofei predicts that there will be less than 30 epitaxial chip companies in the next year, and three domestic MOCVD equipment manufacturers will emerge, but there will be no product sales, the packaging plant will close down 20%, and the downstream display company will have a faster closing speed. The penetration rate of lights and spotlights in the domestic market will exceed 30%, and LED lighting industry sales may reach 1 billion yuan.

Reduced chip and package prices

“In recent years, the investment in the LED upstream chip field has been huge, the price has dropped to 30% in 2010; the average price in the packaging field has dropped by 40% compared with 2010, and the performance is also improving, but it is relatively slow; the end-use products Prices are also declining, the original 300 yuan products with the performance of the current 200 yuan LED products are basically the same. Technological innovation led to a significant price reduction of LED products, the profitability of downstream end products is declining year by year. "Wang Lianghai, vice president of Tongfang shares said.

The huge investment of upstream chip companies in the past few years has led to oversupply of LED products. "The oversupply of LED products is the reason for the price war, but this reason is multi-faceted. Many companies have an excessive expectation for the LED market, blindly transforming the LED industry. Some entrepreneurs only pay attention to immediate interests, and some companies do not. To policy subsidies and preferential policies, go to expand production in foreign countries, because they saw the urgency of foreign investment in the government.” Zheng Tiemin, general manager of Shandong Inspur Huaguang Co., Ltd. said.

Zheng Tiemin believes that the price war will go through complex processes such as production cuts, production cuts, special production and closures, mergers and acquisitions, and integration. The remaining companies will gradually move toward normal development. With the further enhancement of product performance, the price of LED products will increase. Tends to be reasonable.

Pros and cons of government subsidies

In the past few years, under the promotion of energy-saving and emission-reduction policies, various local governments have vigorously supported the development of the LED industry and issued many preferential policies for the industry. Zheng Tiemin believes that many local governments have blindly made decisions, compiled many unrealistic grand plans, and threw out tempting preferential policies, including giving away land and factories to attract companies to invest, which is also an important cause of overcapacity in the LED industry. the reason.

In this regard, Qin Shuguang, deputy general manager of Optoelectronics has different views. He believes that the national government subsidy policy is a very effective means to promote the development of emerging industries. This model is not Chinese characteristics. Many foreign companies still receive government subsidies until now.

Zhu Bingzhong believes that the government has introduced subsidy policies to provide R&D grants and R&D input subsidies to enterprises, which not only can promote the progress of new technologies, but also stimulate the market to form mass production, promote the decline of raw material prices, and provide better support for the development of the LED industry. . The starting point for the government to introduce a subsidy policy for LED companies is to allow a small number of companies to drive the entire industry, to promote a new growth point for energy conservation and emission reduction, and to promote the LED industry to a better direction. There is no problem with the subsidy policy itself. The key is to see how companies can grasp and use the government's subsidy policy.