70% of LED listed companies’ net profit for the company’s net income has been reduced to continue the situation.

As of mid-August, more than 20 listed companies in the LED industry have issued mid-term or performance forecasts. According to the statistics of Flush, 15 of the revenues and net profits both fell, accounting for more than 70%. With more and more companies and visions failing one after another, the LED industry continues to report news about the company’s tight funding and business difficulties.

Fendy Comments:

To say that the most dramatic industry in 2012, it is none other than the LED industry. Recalling the development of the LED industry, it has passed from the nameless to the public, and from the Chaoyang industry to the industry reshuffle, from the government support to all competitions, and now the LED industry has fallen into the "business failure, business influx, and then the enterprise The closure of the company, and the influx of companies, is difficult to extricate themselves from.

The reasons for the resolution are as follows: First, there is an excess of upstream investment, while the demand in the terminal market is lower than expected. As of the end of March this year, there were more than 1,700 LED packaging companies with domestic scale and already mass production, accounting for 80% of global LED packaging companies, and the terminal LED civilian market was difficult to open, and the number of export orders continued to fall, resulting in weak demand.” There is no market for products." Second, the excessive participation of the government and the crazy chase of venture capital have caused the industry in the booming stage to “oversupply” and the price of the product has fallen. The government is still constantly focusing on making the company “strong” and reluctant to let go. The third is the low-end technology of SMEs. The financing channels are narrow. Entwined with "contractual debts" between the enterprises of the upper, middle, and lower reaches, laying a hidden danger for the fragile capital chain of enterprises.

China's LED companies are in critical situation. To solve these problems, we must open up the industry chain and form a coalition of LED materials, epitaxial wafers, chips, packages, finished products, and power supply. In product development, reduce costs and promote the healthy development of the industrial chain. What is certain is that at this stage, it is the best time for the LED industry to integrate M&A. On the one hand, the gradual increase in the use of public lighting and commercial lighting has laid the foundation for the market. On the other hand, dominant companies can use industry consolidation to occupy larger markets. On this basis, LED companies must abandon the bad habits of blindly following the trend, can no longer ignore the short-term benefits and product development and quality improvement, we must identify their own positioning, maximize customer interests, so that companies can be invincible Ground.