Reflection: how to develop the industrial structure imbalance of LED?

According to media reports, the company engaged in the LED industry in Shenzhen accounted for nearly half of the country. March 2009, the Shenzhen municipal government issued a plan to put Shenzhen into the country and even the world's important LED industry R & D and production base, to the size of the industry in 2015 reached 130 billion yuan. At that time, the program is regarded as a blueprint for the development of the relevant cities in many cities. Lack of core technology, excess capacity, investment overheating and other circumstances, so that China's LED industry is facing development bottlenecks.

Because the domestic market is saturated, more and more LED companies began to open up overseas markets, for a time, the export has become a new direction for the development of LED industry, however, rely on exports and not let LED industry to achieve long-term development, increase the development of core technology, strengthen the low-end products and acquisitions in order to truly solve the LED industry structural overcapacity crisis.

March 2009, the Shenzhen municipal government issued a plan to put Shenzhen into the country and even the world's important LED industry R & D and production base, to the size of the industry in 2015 reached 130 billion yuan. At that time, the program is regarded as a blueprint for the development of the relevant cities in many cities.

Recently, however, the Shenzhen municipal government abolished the notice on the issuance of the development plan of the LED industry in Shenzhen in the form of the government gazette. For more than 4 years of planning to be implemented, although the document did not disclose the specific reasons and details, but this is closely related to the development of the industry, especially overcapacity, investment overheating.

It is understood that, from the beginning of 2012, LED upstream investment overheating caused a rapid decline in prices, the downstream enterprise competition, resulting in the closure of some enterprises. This continues until this year. Most LED companies lack technology, chips and other core components, highly dependent on imports. Enterprises do not have the strength of R & D, rely on plagiarism, big price war, so that the market is not standardized chaos. Coupled with government support, not only can not solve the problem of overheated investment in the industry, and even counterproductive. Local governments over the years in the LED industry fragmented, has been hidden for the current overcapacity.

Data show that in 2009, LED upstream chip is still in short supply, in 2011, there has been a significant oversupply. Like other emerging industries, LED industry overcapacity is actually a structural, mainly in the downstream low-end products, while the upper reaches of high value-added products.

In addition, more and more enterprises in China are staring at the LED industry, resulting in a serious imbalance in the industrial structure. Data show that domestic manufacturers engaged in LED industry up to more than 4000, and at this stage LED industrial structure in an unbalanced form. 2012 China's overall LED output value of 205 billion 900 million yuan, of which $159 billion belongs to the downstream terminal applications, accounting for 77.2%, while the upstream LED chip output value of only $7 billion 200 million, accounting for more than 3.5%. This phenomenon leads to traditional sales agents in the promising industry prospects, competing to enter the field of LED at the same time, but at the end of the low end products and hesitant.

Due to the lack of domestic market demand, many LED manufacturers began to open up overseas markets. It is understood that, as the world's major countries and regions have introduced policies and regulations to eliminate incandescent lamps, LED lighting usher in an increasingly large space for development. In 2012, the European Union and Japan banned the use of incandescent light bulbs in the United States, Canada and the United States, most of them from 2012 to 2014. Insiders pointed out that blindly rely on overseas exports is not the future direction of the development of the LED industry.

So, how to develop the LED industry investment adviser senior researcher He Zaihua think, solve the structural overcapacity crisis in the LED industry, need to start from the enterprise itself and the government in two areas. From the enterprise itself, on the one hand, it is necessary to actively expand the domestic market, on the other hand is to strengthen the field of mergers and acquisitions in the low-end areas while increasing the core technology research and development.