Localization of lighting enterprises is irreversible trend

Introduction: Customs rumors still need to be further verified, there is no official accurate information. Prior to the meeting of the CPPCC National Committee Chairman Yu Zhengsheng met with the Taiwan Industrial Association, the mainland economic and trade delegation, said the line, Beijing in many places in the mainland has a super national treatment, which should be gradually canceled. Then a series of recent antitrust events as well as the country's strong support for the attitude of the semiconductor industry, LED industry is likely to become the official support direction. If the future tariff really improve, the move will further restrict the import of foreign and LED products in Taiwan, Taiwan enterprises have a significant impact, to a greater extent to protect domestic LED enterprises.

Tariff rumors only trigger factors, localization trend has long been determined. No matter whether the future tariff rumors have been confirmed or falsified, we do not think the impact of the LED industry investment logic. LED industrial chain to the mainland has been the trend of the times, irreversible. First of all, the overall competitiveness of mainland enterprises LED beyond the trend of Taiwan enterprises have been formed, which is more than a simple policy support more determined, more long-term.

From the capital, technology, talent, market considerations, Taiwan enterprises are gradually losing advantage. The future of mainland LED companies to replace the trend of Taiwan enterprises. LED also belongs to the electronic manufacturing industry, focusing on process innovation, cost control, scale effect and rapid response.

There are several favorable factors for mainland enterprises to replace Taiwan counterparts:

1, labor costs: domestic technical staff and the base, the average salary is much lower than the managers, so that adequate domestic LED graduates in the future can continue to enjoy the bonus".

2, the industrial cluster and the vast domestic market, has formed China mainland LED industry cluster, has the most extensive lighting market demand, concentrated most of the global packaging capacity of enterprises with the rapid response of the service advantage.

3, the valuation difference: in the past few years, the domestic market for the electronics industry in the two PE high capacity expansion of domestic electronics companies to provide adequate and low-cost financial support, but also for the industry to provide the conditions for mergers and acquisitions integration.

4, the management of differences: the domestic LED enterprise management generally in the full vigour of life enterprising, enthusiasm, more struggle.

The most promising alternative to domestic chip and backlight link. In the field of LED chips, Taiwan enterprises market share is still high, accounting for the main market share, with the mainland enterprises to improve product quality and cost, the future of Taiwan enterprises to replace the trend. Large backlight areas, Taiwan enterprises also occupy a major market share, but the competitiveness of mainland enterprises in the growing.