[High-tech LED reporter Shenzhen report] After the investment hot, price cuts, the LED chip field is quietly entering the meager profit or even the unprofitable era. As the price of LED chips continues to fall, some chip manufacturers have no profit at all. Small-scale, non-development-capable chip companies have encountered difficulties, but must rely on sales growth and technological progress to survive.
In the middle of the package field, with the help of the capital market, the domestic packaging capacity will be further released, and the competitive pressure will intensify. The first to be eliminated by the last is a small number of small and medium-sized packaging plants with weak technology and market capabilities.
According to the High-tech LED Industry Research Institute (GLII), since the first half of 2011, there have been nearly 1800 new indoor LED lighting companies in China. Among them, nearly 1,000 new LED indoor lighting companies were added in the first half of this year. In the first half of this year, China's LED indoor lighting market grew rapidly, with a year-on-year increase of nearly 36%. It is expected that in 2012, China's LED indoor lighting market will exceed 25 billion yuan, a year-on-year growth rate of more than 40%.
At present, the current status of the LED market is like two sides of a coin. Excessive competition leads to fierce competition for the survival of the fittest, and it also brings technological advancement. The LED industry is in a period of rapid development, and the industry scale is growing rapidly. At the same time, LEDs are not yet mature, so there will be so many competitors rushing. It is widely believed in the industry that it has now reached a critical period of transition from traditional lighting to LED lighting, and will also be a preparation and testing period for LED lighting companies and traditional lighting companies to fight ahead.
On December 14, 2012, the second meeting of the 2nd G20-LED Summit will be held in Shenzhen Mission Hills Golf Club (Dongguan Club). In the half-day meeting, the participating companies will discuss the follow-up promotion of the G-20 LED product specification, and strive to establish high-quality products and brand image in the eyes of LED lighting terminal consumers as soon as possible.
At the same time, business leaders will also discuss the current LED industry situation and analyze the market trend of the market.
Prior to this meeting, some member companies' leaders made their own judgments on the hot issues of concern to the industry, showing the confidence of the industry leaders in the market trend.
Industry reshuffle forced orderly market competition
Yan Chunhui, President of Yaweilang Optoelectronics (China) Co., Ltd.: Overcapacity in the LED industry is only a surplus of low-end products, and there is still a large market space for domestic high-end chips. In the past, the low-end inventory surplus formed by LED companies due to new plant construction, subsidy promotion, and performance demand will not continue. By integrating and reorganizing and tapping new market opportunities, enterprises can help companies to absorb excess capacity as soon as possible.
The price war between upstream low-end chips has been around for a long time and is still going on. However, the price war has begun to spread to the high-end chip field this year, but I think this is precisely the difficult opportunity for domestic high-end chips to seize market share.
The government's financial subsidy policy will gradually shift from equipment subsidies to technology research and development, new products and market promotion. The upstream enterprises that have the first-mover advantage will increase the integration and speed of vertical and horizontal integration, and accelerate the pace to enter the international market. Most upstream companies lacking capital, technology and market resources will resume orderly competition after merger and reorganization, and find a market space suitable for them.
I believe that upstream integration and orderly competition will promote the healthy and healthy development of the market in the middle and lower reaches. The middle and lower reaches with certain strength and characteristics will also participate in this round of industrial integration.
Zheng Tiemin, general manager of Shandong Inspur Huaguang Optoelectronics Co., Ltd.: LED epitaxial chip manufacturers want to digest production capacity in the context of oversupply market, which can be achieved in the following ways: First, product differentiation; second, expansion of overseas markets; Conversion of non-LED products. If you want to avoid an increase in inventory, the most effective is to temporarily compress capacity. If you can't compress capacity, just rely on the price war to reduce inventory, it is self-defeating.
I believe that the price trend of LED epitaxial wafers and chips will gradually become more reasonable in the future market competition. The so-called rationality does not mean that the price of each chip is further reduced, but refers to the same luminous lumen value, and the unit price will further decline.
The existing plans, construction and production of nearly one hundred epitaxial chip companies will undergo a series of complicated processes such as production limitation, production suspension, conversion and closure, mergers and acquisitions, and integration. In this round of industry reshuffle, there will probably be about 10 domestic epitaxial chip companies left.
Philips Lumileds Asia Pacific Marketing Director Zhou Xuejun: In the next three years, the global LED epitaxial chip companies will undergo an integration process, and packaging companies will also undergo simultaneous integration, which is a process of survival and survival of the fittest. I believe that this will lead to improved product quality and lower costs. With the gradual release of demand in the application market, market competition will become increasingly fierce.
Philips Lumileds has always insisted on a strategy of selling products, so there is no problem that capacity cannot be digested. At the same time, I believe that reasonable inventory is necessary, and that there is no reasonable inventory to respond to customer needs in a timely manner.
Ye Aimin, Secretary of the Board of Directors of Huacan Optoelectronics Co., Ltd.: This year, the entire chip market still maintains a fierce competition. The increase in profits is not the result of the decline in chip prices. When the profit margin is large and the competition is fierce, it is completely understandable that the company actively lowers the price and sacrifices a little profit. However, in the case that the profit is already very thin, it is unreasonable for everyone to risk the loss of each other. I think that the chances of reappearing in the above situation will be smaller and smaller.
Our capacity utilization rate is 100%. There has been no production stoppage since the beginning of this year. In the future, the production ratio of the company's display chip and white light chip will reach 1:1.
In the middle of the package field, with the help of the capital market, the domestic packaging capacity will be further released, and the competitive pressure will intensify. The first to be eliminated by the last is a small number of small and medium-sized packaging plants with weak technology and market capabilities.
According to the High-tech LED Industry Research Institute (GLII), since the first half of 2011, there have been nearly 1800 new indoor LED lighting companies in China. Among them, nearly 1,000 new LED indoor lighting companies were added in the first half of this year. In the first half of this year, China's LED indoor lighting market grew rapidly, with a year-on-year increase of nearly 36%. It is expected that in 2012, China's LED indoor lighting market will exceed 25 billion yuan, a year-on-year growth rate of more than 40%.
At present, the current status of the LED market is like two sides of a coin. Excessive competition leads to fierce competition for the survival of the fittest, and it also brings technological advancement. The LED industry is in a period of rapid development, and the industry scale is growing rapidly. At the same time, LEDs are not yet mature, so there will be so many competitors rushing. It is widely believed in the industry that it has now reached a critical period of transition from traditional lighting to LED lighting, and will also be a preparation and testing period for LED lighting companies and traditional lighting companies to fight ahead.
On December 14, 2012, the second meeting of the 2nd G20-LED Summit will be held in Shenzhen Mission Hills Golf Club (Dongguan Club). In the half-day meeting, the participating companies will discuss the follow-up promotion of the G-20 LED product specification, and strive to establish high-quality products and brand image in the eyes of LED lighting terminal consumers as soon as possible.
At the same time, business leaders will also discuss the current LED industry situation and analyze the market trend of the market.
Prior to this meeting, some member companies' leaders made their own judgments on the hot issues of concern to the industry, showing the confidence of the industry leaders in the market trend.
Industry reshuffle forced orderly market competition
Yan Chunhui, President of Yaweilang Optoelectronics (China) Co., Ltd.: Overcapacity in the LED industry is only a surplus of low-end products, and there is still a large market space for domestic high-end chips. In the past, the low-end inventory surplus formed by LED companies due to new plant construction, subsidy promotion, and performance demand will not continue. By integrating and reorganizing and tapping new market opportunities, enterprises can help companies to absorb excess capacity as soon as possible.
The price war between upstream low-end chips has been around for a long time and is still going on. However, the price war has begun to spread to the high-end chip field this year, but I think this is precisely the difficult opportunity for domestic high-end chips to seize market share.
The government's financial subsidy policy will gradually shift from equipment subsidies to technology research and development, new products and market promotion. The upstream enterprises that have the first-mover advantage will increase the integration and speed of vertical and horizontal integration, and accelerate the pace to enter the international market. Most upstream companies lacking capital, technology and market resources will resume orderly competition after merger and reorganization, and find a market space suitable for them.
I believe that upstream integration and orderly competition will promote the healthy and healthy development of the market in the middle and lower reaches. The middle and lower reaches with certain strength and characteristics will also participate in this round of industrial integration.
Zheng Tiemin, general manager of Shandong Inspur Huaguang Optoelectronics Co., Ltd.: LED epitaxial chip manufacturers want to digest production capacity in the context of oversupply market, which can be achieved in the following ways: First, product differentiation; second, expansion of overseas markets; Conversion of non-LED products. If you want to avoid an increase in inventory, the most effective is to temporarily compress capacity. If you can't compress capacity, just rely on the price war to reduce inventory, it is self-defeating.
I believe that the price trend of LED epitaxial wafers and chips will gradually become more reasonable in the future market competition. The so-called rationality does not mean that the price of each chip is further reduced, but refers to the same luminous lumen value, and the unit price will further decline.
The existing plans, construction and production of nearly one hundred epitaxial chip companies will undergo a series of complicated processes such as production limitation, production suspension, conversion and closure, mergers and acquisitions, and integration. In this round of industry reshuffle, there will probably be about 10 domestic epitaxial chip companies left.
Philips Lumileds Asia Pacific Marketing Director Zhou Xuejun: In the next three years, the global LED epitaxial chip companies will undergo an integration process, and packaging companies will also undergo simultaneous integration, which is a process of survival and survival of the fittest. I believe that this will lead to improved product quality and lower costs. With the gradual release of demand in the application market, market competition will become increasingly fierce.
Philips Lumileds has always insisted on a strategy of selling products, so there is no problem that capacity cannot be digested. At the same time, I believe that reasonable inventory is necessary, and that there is no reasonable inventory to respond to customer needs in a timely manner.
Ye Aimin, Secretary of the Board of Directors of Huacan Optoelectronics Co., Ltd.: This year, the entire chip market still maintains a fierce competition. The increase in profits is not the result of the decline in chip prices. When the profit margin is large and the competition is fierce, it is completely understandable that the company actively lowers the price and sacrifices a little profit. However, in the case that the profit is already very thin, it is unreasonable for everyone to risk the loss of each other. I think that the chances of reappearing in the above situation will be smaller and smaller.
Our capacity utilization rate is 100%. There has been no production stoppage since the beginning of this year. In the future, the production ratio of the company's display chip and white light chip will reach 1:1.
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