The lack of core technology, overcapacity, and overheated investment have made China's LED industry face a bottleneck. Due to the saturation of the domestic market, more and more LED companies have begun to explore overseas markets. For a time, exports have become a new direction for the development of the LED industry. However, blindly relying on exports will not enable the LED industry to achieve long-term development and increase the research and development of core technologies. Strengthening mergers and acquisitions in the middle and low-end areas can truly solve the structural overcapacity crisis in the LED industry.
According to media reports, Shenzhen's LED industry has accounted for nearly half of the country. In March 2009, the Shenzhen Municipal Government issued a plan to propose to build Shenzhen into a national and internationally important LED industry R&D and production base. By 2015, the industrial scale will reach more than 130 billion yuan. At that time, the plan was regarded as the blueprint for the formulation of relevant plans in many cities across the country.
However, the Shenzhen Municipal Government recently abolished the Notice on Printing and Distributing the Development Plan of the LED Industry in Shenzhen in the form of the “Official Gazetteâ€. Although the plan has been abandoned for more than four years, although the document did not disclose the specific reasons and details, it is directly related to the development trend of the industry, especially overcapacity and overheated investment.
It is understood that since 2012, the overheated investment in LED upstream has caused a rapid decline in prices, and the competition of downstream enterprises has been fierce, which has caused some enterprises to close. This situation continues until this year. Most LED companies lack technology, and core parts such as chips are highly dependent on imports. Enterprises do not have research and development strength, rely on plagiarism, and fight price wars, making the market that is not standardized more chaotic. Coupled with government support, it will not only solve the problem of overheated investment in the industry, but even have counterproductive effects.
The local governments in the LED industry have been in the past few years and have laid a hidden danger for the current overcapacity. Data shows that in 2009, LED upstream chips are still in short supply, and by 2011, there has been a clear oversupply. Like other emerging industries, overcapacity in the LED industry is actually structural, mainly in the absence of downstream low-end products, while upstream high value-added products are insufficient.
In addition, more and more companies in China have set their sights on the LED industry, causing serious imbalances in the industrial structure. The data shows that there are more than 4,000 LED industry manufacturers in China, and the current LED industry structure is in an unbalanced form. In 2012, the overall LED output value of China's mainland reached 205.9 billion yuan, of which 159 billion yuan belonged to downstream terminal applications, accounting for 77.2%, while the output value of upstream LED chips was only 7.2 billion yuan, accounting for 3.5%. This phenomenon has led traditional sales agents to look forward to the industry prospects, while rushing into the LED field, but at the same time between low-end products and high-end products.
Due to insufficient domestic market demand, many LED manufacturers have begun to explore overseas markets. It is understood that with the successive introduction of policies and regulations in the world's major countries and regions to eliminate incandescent lamps, LED lighting is welcoming more and more room for development. In 2012, the European Union and Japan completely banned the use of incandescent lamps. The United States and Canada gradually phased out most incandescent lamps from 2012 to 2014.
The data shows that the penetration rate of LED lighting in the Japanese market reached 73.8% in 2015, and the output value of LED lighting in Korea reached 7.8 billion in 2015, 5.6 times that of 2012. In 2015, the global LED lighting market will reach 44.2 billion US dollars, with a penetration rate of 38.6%.
Insiders pointed out that blindly relying on overseas exports is not the future direction of the LED industry. So how should the LED industry develop? He Zaihua, a senior researcher at China Investment Consulting, believes that to solve the structural overcapacity crisis in the LED industry, it is necessary to start from both the enterprise itself and the government. From the perspective of the company itself, on the one hand, it is necessary to actively expand the domestic market, on the other hand, it is necessary to strengthen the research and development of core technologies while strengthening mergers and acquisitions in the middle and low-end areas.
(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)
According to media reports, Shenzhen's LED industry has accounted for nearly half of the country. In March 2009, the Shenzhen Municipal Government issued a plan to propose to build Shenzhen into a national and internationally important LED industry R&D and production base. By 2015, the industrial scale will reach more than 130 billion yuan. At that time, the plan was regarded as the blueprint for the formulation of relevant plans in many cities across the country.
However, the Shenzhen Municipal Government recently abolished the Notice on Printing and Distributing the Development Plan of the LED Industry in Shenzhen in the form of the “Official Gazetteâ€. Although the plan has been abandoned for more than four years, although the document did not disclose the specific reasons and details, it is directly related to the development trend of the industry, especially overcapacity and overheated investment.
It is understood that since 2012, the overheated investment in LED upstream has caused a rapid decline in prices, and the competition of downstream enterprises has been fierce, which has caused some enterprises to close. This situation continues until this year. Most LED companies lack technology, and core parts such as chips are highly dependent on imports. Enterprises do not have research and development strength, rely on plagiarism, and fight price wars, making the market that is not standardized more chaotic. Coupled with government support, it will not only solve the problem of overheated investment in the industry, but even have counterproductive effects.
The local governments in the LED industry have been in the past few years and have laid a hidden danger for the current overcapacity. Data shows that in 2009, LED upstream chips are still in short supply, and by 2011, there has been a clear oversupply. Like other emerging industries, overcapacity in the LED industry is actually structural, mainly in the absence of downstream low-end products, while upstream high value-added products are insufficient.
In addition, more and more companies in China have set their sights on the LED industry, causing serious imbalances in the industrial structure. The data shows that there are more than 4,000 LED industry manufacturers in China, and the current LED industry structure is in an unbalanced form. In 2012, the overall LED output value of China's mainland reached 205.9 billion yuan, of which 159 billion yuan belonged to downstream terminal applications, accounting for 77.2%, while the output value of upstream LED chips was only 7.2 billion yuan, accounting for 3.5%. This phenomenon has led traditional sales agents to look forward to the industry prospects, while rushing into the LED field, but at the same time between low-end products and high-end products.
Due to insufficient domestic market demand, many LED manufacturers have begun to explore overseas markets. It is understood that with the successive introduction of policies and regulations in the world's major countries and regions to eliminate incandescent lamps, LED lighting is welcoming more and more room for development. In 2012, the European Union and Japan completely banned the use of incandescent lamps. The United States and Canada gradually phased out most incandescent lamps from 2012 to 2014.
The data shows that the penetration rate of LED lighting in the Japanese market reached 73.8% in 2015, and the output value of LED lighting in Korea reached 7.8 billion in 2015, 5.6 times that of 2012. In 2015, the global LED lighting market will reach 44.2 billion US dollars, with a penetration rate of 38.6%.
Insiders pointed out that blindly relying on overseas exports is not the future direction of the LED industry. So how should the LED industry develop? He Zaihua, a senior researcher at China Investment Consulting, believes that to solve the structural overcapacity crisis in the LED industry, it is necessary to start from both the enterprise itself and the government. From the perspective of the company itself, on the one hand, it is necessary to actively expand the domestic market, on the other hand, it is necessary to strengthen the research and development of core technologies while strengthening mergers and acquisitions in the middle and low-end areas.
(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)
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