LED industry output will break 200 billion

Has the LED industry already reached the bottom? Zhang Xiaofei judged that next year from January to February is the industry’s “coldest and saddest” time point. He expects that there will be less than 30 epitaxial chip companies next year, and three domestic MOCVD equipment manufacturers will appear, but there will be no product sales. The packaging plant will close down 20%, and the downstream display company will close down. The penetration rate of LED downlights and spotlights in the domestic market will exceed 30%, and LED lighting industry sales may reach 1 billion yuan.

Moreover, the industry's oversupply situation is still increasing. Zheng Tiemin, general manager of Shandong Inspur Huaguang Co., Ltd. pointed out that the LED industry has seen an oversupply in 2011. By 2012, there was a serious oversupply and a large number of companies restricted production, production, closure, closure, and even the phenomenon of boss running, which can be foreseen in the future. There will also be the phenomenon of shutting down production, reorganization of assets, mergers and acquisitions, and new projects.

Zheng Tiemin stated that some entrepreneurs only pay attention to immediate interests, and some enterprises do not have policy subsidies and preferential policies and go to expand production in other places because they see the urgency of attracting foreign investment from foreign governments. All these factors have intensified the industry's supply exceeding demand.

The huge amount of investment that swarmed directly led to a price war. Wang Lianghai, vice president of Tongfang, pointed out that in the past few years, the investment in LED upstream chip area has been huge, the price has dropped to 30% in 2010, the performance index has doubled compared to 2010, and the average price in the packaging field has decreased compared with 2010. 40%, performance is also improving, but relatively slow, terminal application product prices are also falling, the original 300 yuan product with the current 200 yuan LED product basic performance is consistent.

In order to break through the current market, Zheng Tiemin believes that the implementation of product differentiation strategy can ease the pressure brought about by the price war, and should pay attention to research and development and production of high-end products and improve product quality. He also said that mergers and acquisitions between LED companies is also an important direction.

E-commerce channels have become increasingly valued by the industry. The LED industry has also begun to focus on emerging channels. Zhang Liming, director of Xinliyuan, said that traditional channels “have burned too much money” and that he is not successful. He is now “especially advocating e-commerce” and believes this is a very good channel for the LED industry.

Zhang Ming pointed out that in the traditional channels, the cost of a product with a cost of 20 yuan is almost 60 yuan for a chain sales terminal, which is three times the cost price. Even if a company opens its own store, the price is at least double the cost. If it is well controlled, the use of online and offline cooperation will be an opportunity for LED companies," said Zhang Ming.