Shanghai Dinghui: The Road to Differentiated Competition

[ High- tech LED reporter report ] From the beginning of the business, the large-screen display LED matrix products, the first to start the automated production line transformation in 2005, and then to the lighting LED in the 2008, 2009 Beijing Olympic Games and Shanghai World Expo, a large number of applications, Shanghai Dinghui Technology Co., Ltd. (hereinafter referred to as "Shanghai Dinghui") has been steadily and steadily, achieving steady growth of the company.

In an exclusive interview with Gaogong LED reporters, Chairman Li Jiansheng described the company's foothold in these years: "Differentiated competition is the survival of LED companies in East China. Now the company's annual R&D investment accounts for the total The 9% of revenue is to ensure the competitiveness of the products. Meanwhile, Li Jiansheng revealed that the company is developing functional lighting products and is striving to be a pioneer in the industry.

Li Jiansheng introduced that many LED packaging companies have begun to expand into the downstream lighting field, thus leaving a part of the market share of high-quality packaging. At the same time, CDH has decisively compressed the proportion of downstream applications, increasing the proportion of packaging from 70% last year to 95%. It is precisely because of this that Shanghai Dinghui still maintained a growth rate of 35% in the overall growth of the lighting industry this year, even if some enterprises face losses and collapse.


This is not the worst period

High- tech LED: According to the survey of the High-tech LED Industry Research Institute, the output value of China's LED industry reached 154 billion yuan in 2011, a year-on-year increase of 22%, while output increased by more than 50%. What is the growth of Shanghai CDH? How do you think that everyone uses the "cold winter" to evaluate the LED market in 2011?

Li Jiansheng: Compared with 2010, our turnover in 2011 has increased by 35%. At present, our understanding of "cold winter" is that investment is far greater than market demand. In 2010, new entrants increased rapidly, and the participation speed was much faster than the market growth rate. Although the usage of the market has increased, but spread to a single company, the market share is actually decreasing, so everyone will feel the competition is becoming increasingly fierce. I think that after the crazy investment in 2010, the number of new entrants decreased in 2011.

High-tech LED: In 2011, the LED market growth was not as good as expected. Everyone is looking forward to the market growth prospects next year. How do you view the LED market in 2012?

Li Jiansheng: I personally think that the overall LED output value growth rate will exceed 50% in 2012, and the value of the Dinghui package output may exceed 100%.
In 2011, even in the case of such a severe international financial situation, LED output value is actually in the growth channel. Because the entire society's investment in LED is very large, and the relevant authorities of the country are also observing the development trend of the industry.

The European debt crisis and the international financial crisis will surely pass. After the crisis, there will be a period of replenishment; plus many companies will update their product technology; the most important thing is that product prices will continue to decline. Therefore, under the influence of these several forces, the market will be more and more clear after a period of adjustment in the second quarter of 2012. Even more optimistic is that the market may explode in the fourth quarter of 2012. may.

High-tech LED: What is the price of the LED market in 2011? How do you view the price trend in 2012?

Li Jiansheng: In fact, the packaging is not only simple lighting, but also the light quality is good, so the space for the packaging industry to reduce costs is limited. Although the price of chips has dropped in 2011, there is no similar situation with other raw materials. Now, the chip only accounts for about 25% of the overall cost of the package, so even if the price of the chip drops by 40%, it is only about 10% lower than the entire package cost. Coupled with the increase in labor costs, as well as the reduction in the price of finished products caused by market competition, it will increase the cost of three to four points, so the overall price reduction is within 10% of the cost.

I personally think that if the price of lamps and lanterns in 2012 is to fall sharply, it must be greatly reduced in the following aspects: The introduction of some new materials and new technologies, the price of materials will drop sharply, including the optimization of LED structure, the power supply. Understanding and power supply upgrades, chip prices continue to decline, I expect the overall price of LED lighting products in 2012 will fall by 30% -40%.

High-tech LED: The price drop is so large, is there any guarantee in quality, because everyone is questioning the quality of LED lamps.

Li Jiansheng: Everyone is going to engage in LEDs, especially some non-professional LEDs have too high expectations for LEDs. This will lead to different understandings of LEDs, which will result in different quality positioning, which inevitably leads to the whole. The market is mixed. The end result is that only 20% of companies do good products, and 80% of companies do bad products, which naturally affects the reputation of the entire industry. The poor quality of some products does not mean that the LED industry in China is not working, but the "two-eighth law" is at work.

High- tech LED: According to the statistics of the high-tech LED industry, the domestically closed packaging enterprises will reach 10% in 2011. Now the industry reshuffle is a very popular word. Do you think the packaging industry will undergo shuffling in the short term?

Li Jiansheng: I think this is the same as landscaping. We can only pruning flowers and plants when they are long enough. In 2012, the LED industry will continue to survive the small-scale survival of the fittest, but the overall number of companies continues to increase. The most crazy LED is 2010, 2011 and 2012 can not talk about shuffling, the real shuffle should be two or three years later. When the size of the company is large, the shuffle will begin when it encounters vicious competition. Now more is just the competition of technology and talent.

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