The advantages and risks of LED industry in China

The new energy will gradually replace traditional energy to promote economic and social progress of the new energy and drive, often is accompanied by the birth and progress of new technology came into being, a typical LED incubator is the new energy industry. The industry believes that China's current LED industry advantages and risks coexist, the bank should support the development of China's LED industry.

LED industries have obvious advantages

LED LightEmittingDiode (light emitting diode) is referred to as belonging to a compound semiconductor element, can convert electrical energy into light. LED has many advantages, such as high luminous efficiency, environmental protection, long life and small size. The products are mainly used in devices such as mobile phone backlight, traffic lights, outdoor landscape lighting, indoor decorative lighting, automotive lighting, miner's lamp inside and outside the car safety lighting and other fields, including mobile phone usage, LED market accounted for 36%, followed by the signal field, such as traffic lights, accounted for 17%.

LED learning threshold is low. Although the domestic LED industry is relatively weak, the technological level is relatively low, but some domestic enterprises by hiring overseas technical personnel in technology continue to make breakthroughs, many enterprises have independent intellectual property rights, technical level of technical level of domestic high-quality enterprises with Taiwan manufacturers are similar, and the overall gap between international companies are also shrinking.

LED investment is relatively small. LED initial investment of one hundred million yuan can build factories, total assets of LIAN photoelectric, Silan and other industry well-known listed companies is 10 yuan, the domestic enterprises to enter the threshold is low, easy to implement rolling development, and the integrated circuit manufacturing and LCD panel manufacturing to hundreds of billions of billions of yuan investment is "not worth mentioning, China easy access to the enterprise clusters.

Obvious advantages of resources. China is rich in nonferrous metal resources, gallium and indium reserves, accounting for 70% to 80% of the world's reserves, which makes China's LED industry has the advantage of resources. After the technology is mature, LED downstream packaging and device production are labor-intensive, China has obvious advantages in labor costs.

There is a risk of LED industry

Technology risk. LED belongs to the high-tech industry, production technology and product performance continues to improve, the industry can continue to closely follow the LED industry's technological progress, it is crucial for the company. Once the technology is backward, it will lose market share or even losses, and eventually will form a vicious cycle.

Industrial transfer risk. Taiwan about 80% of the LED packaging capacity has been transferred to the mainland, the upstream chip, epitaxial wafer industry transfer is relatively small, but there is an increasing trend. LED industrial structure of the mainland, it is inevitable to encounter the competition of Taiwan funded enterprises, the two competing with each other, at present, the mainland enterprises are still in the wind.

Macroeconomic risk. Global economic recession is likely to affect the policy support for the LED industry, LED products in the western countries and China's popularity rate may also be lower than expected.

Bank should support the development of the LED industry

Key support for the project has been put into operation. LED industry especially the upstream link belongs to technology intensive industries, R & D and industrialization of high risk intervention in the industry, enterprises must have experienced industry experts and technical team, if involved in bank funds early, may face greater risk, in view of this, in the LED industry in China has not yet mature period, the bank for in the project put into operation even after re intervention.

Key support for major projects supported by the government. LED application products more energy saving and environmental protection features. In the "green revolution" theme, the local government in its part of the background strong, well managed LED enterprises given such as government subsidies, financial subsidies, land use and other preferential policies, and the local government to enterprises directly under the orders. As of 2008 the Ministry of science and technology and the Ministry of Finance launched the "ten city lights" semiconductor lighting demonstration project, plans to 2010 from 10 to 20 LED city municipal lighting lamps, Weifang, Dalian, Shenzhen and other 21 city has been listed as a pilot city, it is understood that part of the city has signed a cooperation agreement with the relevant enterprises or under the orders. It is suggested that banks should focus on supporting enterprises and projects that can be supported by the government.

Syndicated loan should be adopted. LED as a new industry, the relative lack of banking industry knowledge, information asymmetry between banks and enterprises, it is difficult to fully grasp the corporate investment and financing planning. The syndicated loan is to spread the risks of banks, effective way to improve the bargaining position of banks and enterprises, banks can understand the link from the capital investment and the impact of business overall investment path and development process, to avoid excessive corporate investment and financing. In 2008, the National Development Bank of Dalian City branch as the lead bank and the Bank of Harbin Dalian branch through the syndicated loan to Dalian Lumei chip science and technology limited company issued 300 million yuan loans (CDB 200 million, 100 million ha), for the company's 6 billion high brightness semiconductor chip (LED) construction project.

Guide enterprises to use bond financing. LED industry in China's large-scale production is still in the initial stage, only by individual banks and single indirect financing channels is difficult to meet the common needs of the enterprise, it is not easy to revitalize the entire industry, short-term financing bonds, medium-term notes and other direct financing tool is decentralized bank risk, reducing financing cost, low effective way to expand business famous enterprises in the capital markets, for smaller businesses, you can also pass