Policy favors and orders decline LED lighting industry is facing reshuffle

The decline in exports, inventories, and the rapid decline in profit growth have caused the LED lighting industry to fail to usher in a real spring under favorable policies.

A group of the 17th Guangzhou International Lighting Exhibition Organizing Committee revealed the data is showing the trend of the LED lighting industry: This year's Guangzhou International Lighting Exhibition area expanded by 10% over last year, historically reached 220,000 square meters. However, the number of lighting companies participating in the show has dropped by 10% from last year, from 2,900 last year to 2,600.

A general manager of an LED lighting company who attended the exhibition told reporters that this was due to the economic downturn in Europe and the United States since the beginning of the year, which led to a sharp decline in orders for domestic LED lighting companies, and some small and medium-sized enterprises may have closed down.

However, the sluggish market has failed to stimulate the adjustment of the industry itself, and the disorderly industry competition has intensified. Under the stimulus of the policy, “some companies that were not in the LED industry started to shift to the LED lighting market. Their purpose was not to produce, but to receive government subsidies.” Sun Jianning, general manager of Shangyu Lighting China, told reporters.

However, this will lead some companies to develop a dependency mentality. They will be eager to obtain compensation for policies instead of focusing on developing products and markets. The head of a domestic LED industry association believes that companies that enter the LED lighting industry for policy compensation will compete in the market under price pressure to seize the market, disrupt the LED market order, and hinder the development of the industry.

Depressed market

Under the influence of the European financial crisis and the inability of the U.S. economic recovery, since the second half of last year, China's LED lighting exports have shown a sharp decline.

“At present, Europe and the United States are still the major markets for LED lamps in China. Since the second half of last year, orders for domestic exports to Europe and the United States have fallen by about 40%.” The head of a domestic LED association told the reporter of the “Daily Economic News” that “ In the current LED market, it is normal for companies to drop orders from Europe and the United States by 30% to 50%, but many companies have a backlog of inventory.

Decline in orders and inventory backlog directly affect the company's turnover.

The performance report released by 12 LED listed companies in the first quarter of this year showed that only Shoushang Optoelectronics and Lianjian Optoelectronics have maintained a slight increase in their growth rate, while the other 10 companies have experienced different degrees of decline in growth rate, which has been maintained The rapid growth of VanRun Technology has seen zero growth.

"The decline in orders has brought some impact on the turnover of listed companies, but for those small and medium-sized enterprises, it may cause the capital chain to break and even cause the company to close down. According to the current situation, the orders of enterprises in the second half of the year may be It will be further reduced. Certain small and medium-sized enterprises will certainly close down at that time,” said Sun Jianning.

Missing core technology

Not only does the market rely on Europe and the United States, but technology is also subject to people. As the core technology of LED lamps, the chip technology is still being mastered by countries in Europe and Japan. As a result, domestic LED industry profits are very slim.

The above-mentioned person in charge of the LED industry association told reporters that “From the point of view of energy saving and environmental protection, LED lamps have more advantages than incandescent lamps. The former replaces the latter as a general trend.”

However, Sun Jianning believes that “although according to the country's line of view, the development prospects of LED lighting industry can be seen, but in recent years LED lamps are difficult to replace the incandescent market, because the price of LED lamps is much higher than the incandescent lamp, it is difficult to be Consumer acceptance."

According to the person in charge of the above-mentioned LED industry association, the price of a 5-watt LED bulb replacing a 60-watt incandescent bulb is about 119 yuan, while the 60-watt incandescent bulb is currently priced at 3 yuan. "It can be imagined that most consumers will not choose LED lamps when they purchase lamps. Prices are the main reason that hinders consumers from using LED lamps. Behind the price is that core technologies such as chips are monopolized by foreign countries, making it difficult to produce LED lamps. decline."

According to report, the current production of LED light chips accounted for 60% of the total price of LED lights, "As long as the chip prices decline, the cost of LED lighting will be significantly reduced, so if you want to popularize LED lights in the country, we must independently develop the core Technology." Sun Jianning said.

Industrial disorder

According to report, in order to support the development of the LED industry, on March 20th and May 7th this year, the country has issued the "2012 Semiconductor Lighting Products Financial Subsidy Promotion Project" and "Semiconductor Lighting Technology Development" Twelfth Five-Year Plan. 》 In the subsidy promotion project documents, the National Development and Reform Commission announced that in 2012 China will spend 40 billion yuan for the purchase of LED street lamps, and provide 30% financial subsidies to users of LED street lamps. In the plan, it is proposed that by 2015, more than 80% of LED core technology chip technology will be realized in China.

In addition to the central government, various local governments have also introduced various policies to support the development of the LED industry.

"The purpose of the government's support policy is to encourage the development of the LED lighting industry, but it is precisely because of the various policies of the government. It also allows some companies that are not in the LED industry to start turning to the LED lighting market. Their purpose is not to produce, but to obtain government. Subsidies," said Sun Jianning.

“Government subsidies can easily make some companies feel dependent. They will be eager to obtain compensation from policies instead of focusing on products and markets.” The head of the LED Industry Association stated that the resulting price war will also affect Industrial development.

In addition, Sun Jianning told reporters: “The government should formulate industry standards to prevent disorderly competition and overheated investment while introducing various support policies. Only in this way can the LED lighting industry develop healthily.”

Shuffle has begun

In order to get out of the industry downturn, listing has become a priority for many LED lighting companies.

"Companies seeking listing are preparing for the future to prevent future mergers and acquisitions." Liu Shengping, chairman of the China Lighting Association, told reporters that at present, China's LED lighting companies are at the lowest end of the industrial chain and have the lowest profits. "If companies can go public, The company's main investment direction will be the upstream industry of LED lamps, which is the production of epitaxial wafers, chip manufacturing, and supporting equipment for LED lamps. Only in this way can companies have a place in the LED industry."

However, at present, most of the LED lighting companies in China are small and it may be difficult to survive the industrial downturn. The prospects of small and medium-sized LED lighting companies are worrying. They may face bankruptcy, or they will be integrated by some large international companies and domestic listed companies. The industry faces reshuffle. The said person in charge of the LED Industry Association said, “The realization of the demand for shuffling by companies in many industries is increasing. In fact, since last year, many LED lighting companies have closed down and shuffling has begun.”

According to public information, at present, there are 8,000 LED companies in China, of which more than 5,000 are in the downstream of the industrial chain. “These companies may face the risk of closure. Taking Shenzhen as an example, there are more than 80 LED lighting companies that have gone out of business.” An industry source said, "This year's International Lighting Fair exhibitors reduced, but also showed signs of industry reshuffle, but only in this way, LED lighting industry will have better development prospects."