LEDinside: Mainland LED packaging industry mergers and acquisitions tide

[LED] China network according to the TrendForce's green energy division China LED package LEDinside latest report shows that in 2015, Chinese LED packaging market size of 61 billion 400 million yuan, an annual increase of 16%, the overall slowdown in growth. This year, the global economy, China's global LED industry as the main production base, affected by the decline in exports. 2015 in the first half of China's LED lighting exports grew by 21% year on year, compared with last year's decline of 80%, significantly.

LEDinside analyst Yu Bin pointed out that the growth rate of lighting market demand is not as good as originally expected, resulting in the current excess supply capacity of LED packaging. Market competition intensifies, resulting in the continued decline in product prices, many small and medium manufacturers operating difficulties, industry reshuffle will continue. Therefore, some China LED vendors across the capital, mergers and acquisitions have launched action, hopes that by mergers and acquisitions to grow their own strength and transformation. Due to the current number of LED companies in mainland China is still large, most of the main low-end market. As for the export needs of manufacturers, the acquisition of a patent international manufacturers can also improve their patent layout. So the next period of time, China, LED industry mergers and acquisitions will be frequent.

The development of LED industry, Chinese matures, mergers and acquisitions has kicked off the lead by the packaging industry. 2014 began, China's LED packaging industry began to appear in the case of mergers and acquisitions, mergers and acquisitions this year, the tide began to come, including Lumileds, Bridgelux and other international manufacturers are also involved.

Yu Bin pointed out that China's LED packaging market for a long time in the stage of intense competition, especially in the field of lighting LED, gross margin is at a low level, but also reflects the low profitability of the situation. Therefore, each LED manufacturers are seeking a variety of ways to enhance the competitiveness of the transformation, mergers and acquisitions is one of the ways. There are three common ways of mergers and acquisitions:

1 level of integration: LED packaging manufacturers through mergers and acquisitions to expand the scale of competition with the industry, the integration of resources, enhance the technical strength of each other. Examples include honglitronic acquisition smalite, REFOND optoelectronics & Ling tao.

2: vertical integration through mergers and acquisitions or downstream manufacturers of raw materials, to reduce the purchasing costs of raw materials or consolidate the downstream estuary. As the country star power acquisition invenlux (chip factory); honglitronic acquisition (hardware support factory); good photoelectric Mason technologies acquisition date (sign advertising application).

3 cross border cooperation: mainly by foot to other areas to spread risk. Honglitronic is the best example, through investment in science and technology, in order to enter the vision Diener Hui vehicle networking industry, but also investment Amiri Cayman foot Internet banking.

In addition, due to the increasing demand for mergers and acquisitions, capital owned companies have set up investment companies, and strive to integrate resources through capital operation, enhance the overall competitiveness. For the acquisition side, the injection of new funds in addition to ease their financial pressure, but also the use of funds to expand production capacity, continue to expand the size of the enterprise.

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