In 2017, LED chip prices shot: how to take the downstream trap dilemma

The LED industry in 2016 set off a price surge in the new year has not died down, the chip giant Sanan Optoelectronics in early 2017 a notice of price increases over the industry brush circle of friends.

The face of upstream product prices, how to take over as the downstream enterprises facing problems. Conduction is the price of the rise to the downstream products, or to take the opportunity to maintain the original price or minor price push competitors out? In the January 5th annual meeting of the high tech LED, different business representatives put forward different views.

Industry voice: price is normal

The industry has been covered with a three light electronics company official seal, contact letter, said the decision to raise the price of S-30MB/S-32BB series of products from January 10, 2017 to 8%. Deputy director of packaging enterprise nationstar R & D center Xie Zhiguo et al confirmed that the first day of nationstar 2017 received a notice of price hikes Sanan optoelectronics.

As the mainland chip enterprises, the gross profit margin is already an optoelectronic is higher than the industry average.

"An optoelectronic chip business in 2016 gross margin in about 30%, is the highest in the industry. Set of state consulting Shenzhen Industrial Research Center Director Wang Fei accept the daily economic news reporter, said. But he believes that although an optoelectronic three the highest domestic gross margin to do, but this is due to the normal industry gross margin, "the chip is the most important assets of the industry, not only expensive equipment, but also need to ensure the continued investment in R & D and production, 30% of the gross margin is very normal industry gross margin in the first two years of competition, too the intense, gross margin to 10%, some listed companies in 2015 gross margin even single digit. "

Therefore, Wang Fei believes that three optical price is normal, "low margin can not guarantee the normal development of the enterprise. "He also said," Sanan optoelectronics prices on the one hand is the cost reasons, on the other hand with the market concentration, the main supplier of the industry focus on several manufacturers, determines the seller's strong position in the market. "

Any enterprise to rise product prices are likely to bring the risk of loss of customers. Chip manufacturers EPISTAR deputy general manager Xie Mingxun said for example, EPISTAR LED products in seven or eight years ago to Samsung had a price, and the result is no longer Samsung for two years with the company, "not to cannot but not rise. "

How in the downstream enterprises react?

According to the lighting company deputy general manager of three male Aurora Lin Yan introduced his company 206 years after the 9 price, this year is the price of most products, the biggest year for LED industry.

And in 2017, three optical rise again, no doubt to the LED package and application in the downstream enterprises in the fierce competition tianchai plus fire, also led the industry thinking. How to take over the middle and lower reaches of the company, is the conduction to the downstream, or take the opportunity to bend overtaking compression profit for the market?

Xie Zhiguo believes that the country is now more concerned about the star Optoelectronics Market, the price will be part of the downstream transmission, the price range of products will rise 5% to 10%, but in order to further reduce the market gross margin. However, for packaging enterprises have not much profit margins compression. Xie Zhiguo also admitted that the profit margins of the packaging plant has been hovering in the margins, in the case of upstream product prices, internal control is not good packaging companies will be a loss, good internal control will earn 10 points gross margin. Xie Mingxun said that the competition in the industry to the end, will tend to be stable, finally will be eliminated, for the chip enterprises, may be only about 5 enterprises living in this world, this is the process of LED enterprise oriented and stable.

But there are companies that this is the industry cycle fluctuations. The application of LED joint Innolux general manager Ning Sun believes that chip prices are "the wave, the next wave will have a downward trend, but not like the previous two years so big. "

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