LED enterprises how to solve the problem of excess capacity?

In recent years, under the dual stimulation of the market environment and government subsidies, LED upstream production capacity expansion, increasing competition in the industry. The majority of enterprises to expand production scale to dilute the cost of production, in order to lower prices in exchange for market share, resulting in LED chip prices continue to decline. In particular, some LED vendors rush to complete the purchase of the machine before the end of the mainland subsidy policy, making the new production capacity to accelerate the release of the mainland, resulting in the deterioration of the global LED overcapacity situation deteriorated.

In the LED enterprise, generally overweight capacity expansion situation, EPISTAR, Samsung, CREE and other companies have made a selective decision to cut production, in order to ease the situation and imbalance of price LED industry supply and demand falling pressure. Visible overcapacity has become a major obstacle to the development of LED industry. However, in the face of overcapacity problem, LED companies and how to break through the siege?

M & A integration, enhance competitiveness

The downward pressure on the market led to the emergence of many LED companies set off a wave of mergers and acquisitions. 2016, LED industry has undergone more than and 10 merger and acquisition cases, there are more than an average of more than 3 M & A cases occur every month, covering all aspects of the LED industry chain.

Integration can make LED industry better development, for small businesses is undoubtedly a good shade tree, and for large enterprises is also at low cost to expand production capacity, a way to maintain its market position. LED enterprises can vertically integrate related enterprises to further expand the scale of the enterprise, thereby reducing procurement costs, the formation of synergies, enhance their competitiveness and industry influence. If HC semitek bid 1 billion 80 million yuan to buy 100% stake in Yunnan langene technology, effective integration of aquamarine technology production capacity of sapphire substrate, and through the acquisition of Rui Jing optoelectronics, development and formation of epitaxial chip, chip, extending the application of LED terminal industry chain.

Improve the industry system, adhere to encourage innovation

Due to the low barriers to entry in the LED industry in the past few years, a large influx of capital, as well as oversupply, the industry chain are showing a sharp decline in gross margin, many manufacturers are facing losses or even eliminated. According to incomplete statistics, in 2015 the market disappeared LED enterprises reached 4000. 2016, LED industry supply and demand easing, overcapacity phenomenon will become increasingly apparent. We should give full play to the role of guidance and constraint planning, policy, standards, strict access conditions, strengthen the industry access management, improve the industry overcapacity situation monitoring system and early warning system, strengthen and improve the management of the industry.

The face of the entire industry overcapacity, lack of industry standards, product quality uneven situation and other issues, enterprises must ensure product quality, while strengthening product innovation. At present, the entire LED industry, a lot of products are highly homogeneous, innovative applications are the best choice for the development of evergreen.

The importance of innovation can be reflected in all aspects of the LED lighting industry. Channel innovation to reduce intermediate links, directly through the channel between enterprises and consumers, will help alleviate the industry overcapacity phenomenon; product innovation will help enterprises out of the industry products homogenization trap; innovation of enterprise management mode can help enterprises out of the predicament of rising operating costs; innovative financing channels, such as the current financial network the financing P2P platform, can let the enterprise obtain more financing channels. Adhere to encourage innovation, encourage R & D, application of new technologies, is conducive to the new vitality of the LED industry.

Increase research and development, from manufacturing to creating

In the market gross margin continued to be squeezed under the circumstances, through continuous price to gain competitive advantage is not a permanent solution. In order to cope with price competition, chip companies will cut the cost of the wafer by cutting the epitaxial wafer into smaller chips. But with the decrease of the chip size, it is necessary to increase the injection current and improve the power density of the light in order to achieve the same luminous power, which requires higher performance of LED.

On the one hand, with the increase of power density, the luminous efficiency of LED is decreased, which requires the use of more excellent performance in the LED epitaxial structure to offset the decline in light efficiency. On the other hand, the decrease of LED light efficiency under high power density also means that more heat is produced, which puts forward higher requirements for the performance and reliability of LED chips. If the enterprise just chip size blindly and complemented by epitaxy and chip design research and development, will not only lose the competitiveness of their products, but also make the product has super power to work and produce potential security risks.

In the context of the industry reshuffle, LED industry from the previous rush into the rational, technology research and development has become an important means of corporate restructuring. To this end, enterprises should be encouraged to increase R & D investment, increase the technology content of products in order to improve product added value.

For example, latticepower (Jiangxi) Co., Ltd. in crystal and energy-efficient lighting company in Nanchang University to complete the "silicon substrate of high light efficiency of GaN based blue light emitting diode project" won the first prize of national technological invention; KingSun to join Tsinghua University to complete the "3D free surface optical light regulation behavior of construction and application in the semiconductor lighting the project won the 2014 annual National Award for technological invention, all of these show enterprises attach importance to technology research and development, increase research and development, innovation value chain system construction of independent intellectual property rights, the innovation and research and development capabilities to create the core competitiveness of enterprises, so as to realize the" China manufacturing "to" create Chinese".

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