Foreign investment in China's LED industry

LED, light-emitting diode two. This important electronic components has become an indispensable part of the world's electronics industry. LED manufacturers in China, although large in number, have only a small profit. The highest in the top of the industrial chain of foreign companies but holding huge cake is always happy.

Very little profit

In recent years, the rapid development of LED technology, and used widely in city landscape lighting, road lighting, LED lighting companies have continued to increase, industry output expands quickly, become the focus of the development of world economic revitalization. China's "ten cities", the United States and Europe, solid-state lighting plan, the LED lighting industry will be included in the national development strategy plan.

Although China has a large number of LED production companies, but they did not get the industry's due profits. Because whether it is the core technology chip or the top of the industrial chain, are controlled by many foreign companies.

Tang Guoqing, director of China Lighting Industry Association semiconductor lighting Specialized Committee, said in an interview with the media: Master epitaxial wafers and chips and other core technologies and manufacturing enterprises, accounting for 70% of the entire chain of profits. In the remaining 30% of the profits, as well as the chip packaging companies have been taken away, leaving only the end of the application of the link to 10% of the.

In fact, the beginning of 2009, Chinese LED lighting market, foreign-funded enterprises "at top speed" to seize the market. Europe and the United States as well as Japanese lighting giants have launched LED new lighting. Among them, the Japanese companies such as Panasonic, Toshiba and other six lighting giants in just a few months before and after the announcement to enter the field of LED lighting, its own research and development of LED lighting bulbs to the market.

Not only that, but also the price war in full swing. It is reported that in June 2009, the Japanese Department of SHARP to market a bulb type LED lamp, the price close to half of the original products. Then, another Japanese competitors - Toshiba lighting began to cut prices. Matsushita, MITSUBISHI also unable to promote market competition in LED. So far, the main lighting manufacturers in Japan all gathered.

LED products have not much profit on the terminal so that the United States and Japan and the Japanese companies to carve up, while the upstream industry profits, China simply can not compete. A Pearl River Delta LED practitioners told the international financial news reporter.

"All Chinese basically 90% LED companies are fighting in the terminal area, while foreign enterprises grasp the most upstream profits. Our company has been adhering to the weakest link in the margins, but unable to make a difference in technology. Industry insiders said helplessly.

Surviving opportunity

Although there is no difference in the level of technology, but this does not mean that Chinese enterprises can only survive in the low end of the industrial chain. As an emerging industry LED, although its core chip technology is monopolized by the international giants, but if the domestic enterprises to research and development, it is possible to master the core technology to seize the profits after the top.

Statistics show that by the end of 2009, the Pearl River Delta region has more than 1 thousand and 300 companies engaged in the middle and lower reaches of the LED business, of which more than 900 in Shenzhen. However, with the top technology R & D capability of enterprises is rare. Allegedly, China has LED chip production capacity of only 62 companies, if coupled with large-scale packaging capabilities of enterprises, but also in the upper reaches of the layout of the industrial chain in the hundreds. In the western developed countries, whether it is government or business, investment in R & D in emerging industries are very large, some companies will come up with hundreds of millions or even billions of dollars.

While the global LED core technology of the four giants - CREE, OSRAM, PHILPS, Nichia approximately holds 70% share of the profits. CREE, for example, vice president of CREE's global strategy and business expansion has admitted: China LED lighting market is an important factor in the growth of CREE revenue. At present, CREE has plans to shift the focus of the LED industry to China, the company in 2010 about $167 million in the vast majority of investment plans will be used in china.

It is predicted that China's LED output value is expected to exceed 150 billion yuan in 2010, this data is in 2008, the number of times, and the annual growth rate of 30% of the rapid growth rate of two. These companies in Europe and the United States is the fancy of China's massive demand for LED. And some domestic enterprises due to lack of funds and away from the field of research and development.

In the potential of the domestic enterprises have such a view: LED industry, the key problem is that the government should be able to foresee the importance of mastering the core technology for the development of emerging industries. If companies do not have the ability to research and development, then the government should support its technological innovation.

Insiders suggested that in industrial policy, the government can refer to the specific rules for the implementation of Japan and other countries, give carbon credits after conversion of cash subsidies for the use of LED enterprises, to promote domestic LED lighting enterprises to obtain a reasonable profit and increase production technology.

Exciting is that in August, the national development and Reform Commission published the "opinions of the development of semiconductor lighting industry" (hereinafter referred to as the "opinions"), will encourage domestic equipment, domestic equipment to establish risk compensation mechanism, to support the localization of key equipment, and the semiconductor lighting energy industry development "six year plan".

An unnamed industry researcher told the international finance news reporter: "opinion" of course is a good thing. However, the core technology, talent, standard system and the lack of funds and can not simply rely on the opinions to solve. Encouragement measures