Who is going to take root in LED manufacturing?

LED is singing "returning warmth", and the industry-level M&A has become the norm.

Last week, Cree sold Wolfspeed to Infineon for $850 million, and Alto Electronics plans to buy $300 million for lighting.

Aside from the confirmed acquisitions and bidding for OSRAM's lighting assets, Mulinsen will also have results in the near future. In addition, the acquisition of Wanrun Technology will also be announced in the near future.

Inserting a rumor that the industry is very concerned about, recently, LeTV will acquire VIZIO, the largest TV manufacturer in North America, which has caused many LED factories to worry about the long-term reshuffle of domestic mergers and acquisitions to the LED industry.

What is unexpected is that the next day LeTV clarified the rumors of the acquisition of TV maker Vizio.

"rooted theory" of cross-border enterprises

The emergence of an episode also reveals the current fiery phenomenon of LED industry mergers and acquisitions. Like LeTV, which is “not doing business”, many LED listed companies are no longer deeply rooted in LED manufacturing R&D, but are more attracted to some emerging concepts and popular markets: such as VR, “Internet +” and other emerging industries.

"Indeed, at present, cross-border mergers and acquisitions of enterprises have caused the whole LED industry to shake up, but on the other hand, enterprises that achieve mergers and acquisitions and cross-border are mostly leading enterprises in the industry. They are able to merge and integrate resources. Cross-border development into new areas to create 'dual owners' is largely dependent on strong financial support," industry experts pointed out.

"As a manufacturing-oriented LED industry, if no company continues to dig deep and invest in technological innovation, its future is worrying," said Wang Gaoyang, deputy general manager of Hongli Optoelectronics.

It is true that, in the case of Hongli Optoelectronics, even though it has been officially renamed as “Hongli Zhihui”, it lays the foundation for the company to build the “LED+Car Networking” dual main business, but the LED industry is also not relaxed.

It is reported that in order to maintain the continued high growth of LED main business, Hongli Nanchang LED production base will be put into production in the near future. The company also said that the capacity expansion will be gradually arranged according to the LED market demand and the actual situation of the company.

Indeed, under this industry trend, LED companies should be more aware of the need to improve the status quo of the industry. Cross-border mergers and acquisitions are difficult to solve fundamental problems. Enterprises must solve the urgent technological innovation problems, do a good job in product quality, and take root in manufacturing and market development. It is the real way out.

LED high-end technology remains to be developed

"Actually, in the high-end LED market, domestic LED companies are still difficult to cover the fact that a large number of foreign products are imported, and there is a lack of high-end products," said Wang Min, CEO of Jingneng Optoelectronics.

According to Wang Min, high-end products that rely on imports are mainly concentrated on high-power products. “There are not many enterprises that can do high-power in China, especially those with higher requirements, such as street lamps, car lights, and mobile phone flash lamps. Depends on imports."

In the field of upstream chips, especially high-power chips, domestic LED companies still have a certain gap between technology and international companies. "In terms of packaging and application, the technology of our domestic products should be synchronized with international companies, or advanced. However, in terms of chips, domestic companies still need to catch up." Wang Min said.

It is true that the introduction cost of upstream chips is high, and with the decline in the price of LED products, small and medium-sized enterprises can only obtain meager profits, and it is extremely difficult to survive.

In the downstream industry, the technological innovation of the industry chain has almost stagnated. The company has no new products to expand the market. The homogenization products have almost swallowed up the entire industry. Therefore, the lack of core technology is an important reason for the LED SMEs to break.

Experts in the industry pointed out that in the downturn of the market and the turmoil of mergers and acquisitions, the domestic LED industry is ruined by technological innovation. This situation is worrying. At the same time, in this difficult situation, SMEs should be more rational, grasp the fundamentals, make good products with excellent quality, and must pay more attention to technological innovation and upgrading, and improve efficiency. Only in this way can we gradually get out of the industry dilemma.

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