Double Overcapacity in Investment Capabilities Chinese LED Market Depression

Six ministries and commissions including the National Development and Reform Commission jointly issued the “Semiconductor Lighting Energy Conservation Industry Plan” (hereinafter referred to as the “Planning”). Although the output value target of the LED lighting industry in 2015 was lowered from 500 billion yuan in the “Twelfth Five-year Plan” to 450 billion yuan, However, in the "planning", the LED lighting application product is definitely set at 180 billion yuan.

According to industry insiders, the market share of general lighting products in 2010 was 27.5%, the market share of traditional high-efficiency lighting products was 72.3%, and LED lighting products were only 0.2%. The 2015 development goal is that all 60W incandescent lamps used in general lighting will be eliminated. The market share of general lighting products will drop below 10%; traditional high-efficiency lighting products will be stable at around 70%; LED lighting product share will increase to 20%. the above.

"The LED lighting industry will usher in an 'inflection point' this year, and companies in the industry should substantially explore the commercial market." On March 12, Dr. Liu Hongzhi, a doctoral researcher at the School of Public Administration and Development of Zhejiang University's School of Public Administration, told reporters that the industry reshuffle is the law of the market. The future LED lighting industry will be the same as today's color TV industry.

Double excess domestic investment capacity in the domestic market "kill one"

Due to the weak global economy, sales of domestic LED products have fallen sharply since the second half of 2011.

According to industry sources, while the LED lighting industry has been promoted into a strategic emerging industry, the LED industry has also fallen into a crisis. “The lack of domestic market development, coupled with the large amount of bubbles generated by the excessive investment in the upstream, has caused many LED lighting companies to face The risk of loss or even closure."

According to incomplete statistics, in recent years, some companies operating LED products have suffered losses, and even 30% of core companies have fallen into bankruptcy.

“Upper upstream investment is the main reason for the loss of the company,” Zhu Xiaoyu, chairman of Zhejiang Zhongzhou Optoelectronics Co., Ltd., told reporters that at present, there is a market chaos in the LED industry, there is no independent brand, and consumer acceptance is low.

At the same time, due to the booming market created by the influx of capital, the industry’s upper, middle, and low-end products are getting together. "From the beginning of 2010, the industry has seen a double surplus of investment and production capacity. Compared with the 'forcing of the situation' in the export market, the domestic market is even more 'a killer'." The relevant market analysts told reporters that the helpless situation, the LED industry from In 2012, when it was caught in the “smoke of smoke” in the price war, the industry reshuffled large numbers of companies and 6000-7,000 related companies closed down.

Pushing the core technology New Deal is conducive to the market reshuffle. "The LED industry has tremendous business opportunities and encouraging development prospects, but at present the characteristics of the LED market are disorderly development, lack of demand, and the concentration of products in the low-end market is exactly the same as the photovoltaic industry." Without effective control, it is very likely to follow suit.” A few days ago, when attending the “2012 Hangzhou LED Lighting Summit”, Guan Baiyu, Secretary-General of China Semiconductor Lighting/LED Industry and Application Alliance, said in an exclusive interview with reporters.

Today, Guan Baiyu's voice on behalf of the industry has finally received the support of decision makers.

Guan Baiyu said that "Planning" has continued the government's supportive policies for LED in the past and maintained the continuity of the policy. However, “Planning” reduced the output value of China’s LED lighting from RMB 500 billion in 2015 to RMB 450 billion in 2015, and adjusted the number of LED lighting companies from 20-30 to 10-15. The government's rational attitude.

However, the "Planning" set the target, the localization rate of LED chips in 2015 reached more than 80%; large MOCVD equipment (LED chip production equipment), the key raw materials to achieve localization; testing equipment localization rate of more than 70%.

"Now most of the domestic LED chip core technologies are controlled in the United States, Japan and other countries, the domestic LED lighting chip innovation technology is lacking," Liu Hongzhi told reporters, compared with the international giant, "localization" can be for the development of domestic LED companies Make room.

In Liu Hongzhi's opinion, the introduction of policies is conducive to the market reshuffling, and promotes technology-based SMEs to develop core technologies to form a government and market “two-wheel drive” model. "Overcapacity has become the industry's "hard", the future LED industry will maintain a 20% -25% growth, the market 'inflection point' has emerged." Liu Hongzhi said.

The first entry into the government procurement list LED market will be the future development of authoritative industry statistics, 2012 LED industry output value of 209.5 billion yuan, an increase of 34%. Of which, 41.7 billion were for outdoor lighting, 37.2 billion for landscape lighting, and 33.5 billion for indoor lighting. Among them, indoor lighting grew significantly, up 80% year-on-year.

For many years, Fan Feijie, the director of design for many years in the industry, has come up with a few strange things. Some customers have asked for "only using LED lights." With the reduction of LED cost and the deepening of the concept of environmental protection, LED lighting with less power consumption and quick installation has become increasingly popular. "Adjusting with lighting, the atmosphere of the living room is greater than the general accessories." Fan Feijie said.

Zhu Xiaoxuan told reporters that under the current background of the global energy shortage, as a new type of green light source product, LED is bound to be the future development trend, and the 21st century will enter the era of new lighting sources represented by LED.

"Energy conservation is an important issue in the future. In the field of lighting, LED applications are drawing the attention of the world. The global market share has increased from 2% in 2007 to 11% in 2012." Zhu Xiaoyun said.

According to industry sources, with the launch of the “Planning”, it is expected that the central government entities will implement more national LED industry stimulus plans, local government’s LED policy support will be more regulations, and LED lighting investment will accelerate. In the context of macroeconomic recovery, the overall prosperity of the LED industry chain is also expected to stabilize and pick up.

In fact, in the beginning of January this year, the “List of Government Procurement for Energy-saving Products” (13th) publicized by the Ministry of Finance included not only self-ballasted fluorescent lamps for general lighting, double-ended fluorescent lamps for general lighting, and high-pressure sodium lamps for the first time. Including LED lighting products, including LED road/tunnel lighting products, LED downlights and reflective self-ballasted LED lights.

Orient Securities said that LED lighting products were included in the government procurement list for the first time, mainly because the LED is more energy-efficient and highly favored. It is expected that as this LED lighting product is selected into the government procurement list, local LED lighting promotion is expected to further speed up, so 2013 will be LED. Lighting promotion accelerated years. This will undoubtedly benefit the application of LED lighting in various fields, which is expected to boost the confidence of LED lighting promotion and benefit LED lighting companies.

"In the future, the LED industry will maintain 20%-30% growth, of which, indoor lighting will maintain an increase of more than 50%." Liu Hongzhi said.