LED market continues to shuffle

The ancients said, "It must be divided for a long time, and it must be divided for a long time." LED industry "Jin Sanyin IV" sales traditional peak season ended, LED lighting industry is concentrated from the previous scattered development. After encountering the embarrassing situation of price quagmire and increasing income, the LED lighting industry finally ushered in a period of warming up in the first half of last year, even the momentum of the outbreak.

Quietly, in 2014, it was again in June. Looking back at the LED industry, we couldn't help but sigh "remembering the old days and hope the Ming dynasty prospered in the world." Some companies failed to break the funds during the shuffling period and collapsed, and some made money. full.

With the government's various policies to support the development of the LED industry, the effect of market recovery has become clearer, preferential policies, strong market demand has attracted small and medium-sized enterprises, "shrimp soldiers will be" as a whole. For many new LED companies to join the battlefield of the body, can only allow the market to choose the survival of the fittest. To healthy development, an industry must comply with the laws of market economy, can not be built out of market demand to build "a castle in the air."

A number of industry experts predict that the current LED industry needs a vigorous reshuffle. For LED companies that want to survive in this period, it is difficult to avoid a bloody storm. After the reshuffle of the market for the survival of the fittest, almost 70% of the companies will be eliminated, leaving behind a group of LED companies with strong funds and strong scientific research capabilities. They eventually evolve into a "winner-take-all" championship game.

Market reorganization, competition "emergency"

Since last year, local governments have continuously issued measures for energy-saving and emission-reduction efforts. In order to inject a booster for emerging LED companies, LED has been used as a sample of the national energy-saving and environmental protection industry and has attracted a large amount of capital. Especially from 2010 to 2012, there has been a swarm of bees investing in the LED industry. The production capacity of overheated investment in the previous period was released from the second half of 2011 to the first half of 2013, causing LED prices to continue to fall.

Of these policies, the most exciting one is the “Circular on Enhancing Work to Ensure Implementation of the 2013 Energy Conservation and Emission Reduction Targets” issued by the National Development and Reform Commission. According to the spirit of the "Notice", the National Development and Reform Commission, the Ministry of Finance, and the Ministry of Housing and Urban-Rural Development are jointly responsible for promoting the implementation of green lighting projects, implementing the semiconductor lighting energy-saving industry plan, implementing energy-saving products and benefiting people's projects, and promoting 130 million efficient lighting products.

"With the development of the industry, the government's relevant policies for the LED industry are absolutely good, but it is sometimes difficult to implement them." One of his executives who did not want to be named also expressed his worries. He said that if local governments do not examine whether LED companies really grasp the core technology, or if there are land, capital, and equipment idle, too many companies entering the LED industry may cause negative effects and undermine market rules.

Since its development, LED middle and lower reaches of the industrial chain is experiencing a big wave of Ebb, the game between the scale of the emerging LED companies and traditional lighting manufacturers and integration has kicked off. One person in the industry complained that the LED terminal application market is equally hot and cold: the outdoor media market is in the doldrums, and the LED display market is almost saturated; LED-backlit LCD products did not open until last year, but after a year of explosive development The market penetration rate of this product is nearly 70%, but it is also facing the impact of the new display technology OLED; the lighting market relies on government projects such as street lamps updating, subway lighting and so on. For example, chip manufacturers, midstream packaging companies face more fierce competition.

Some industry sources bluntly stated in an interview that, on a nationwide scale, there are about 4,000 downstream companies in the industry chain that are solely engaged in the production of LED products, and there are about 1,200 mid-stream companies. In addition, upstream companies, such as materials and equipment, are also operating in the country. In total no more than 6,000 companies. In addition, there are some companies that have transformed from traditional to LED companies or LED products. There are about 2,000 nationwide. In addition to purely corporate enterprises, there are a total of no more than 8,000 LED product companies. Among them, Shenzhen enterprises account for about 40% of the country's total, which is about 3,200.

At the same time, as a result of being in the middle of the industrial chain, most of the packaging companies are stuck in the “continuity bond” dilemma, that is, the downstream terminal application manufacturers default on the money of the packaging manufacturers, and the packaging manufacturers can only arrear the money of upstream chip and luminous material manufacturers. In addition, major lighting manufacturers such as Philips, Sunshine Lighting, Op Lighting, and Foshan Lighting are slowing their bows, transforming and transforming themselves and attempting to regain their sovereignty. Undoubtedly, the game between the emerging LED oligopolists and the traditional lighting giants will shape the entire industry in the future, and mergers and acquisitions in the upper, middle, and lower reaches of the industry chain are gradually becoming the main theme of the advancement of the LED industry.

Deep shuffle, LED industry will reconstruct reshuffle, triangle debt ... These dazzling words frequently appear in the LED industry. Some LED companies have fallen into the trend of bankruptcy, because the blind expansion has led to a serious surplus of production capacity. Once the funds have gone wrong, they will be defeated.

The new and old oligarchs at home and abroad represented by Career, Everlight Electronics, Sanan Optoelectronics, BDO Runda, and Epistar Optoelectronics have begun to accelerate mergers and acquisitions integration between the upstream and downstream industry chains. Their large-scale actions are frequent and are like tigers going downhill. Impact on the LED industry structure.

The newly-emerged star companies are also divided into two levels, and they have not been in the LED industry for a long time. For example, Foshan Lighting is unmatched at the speed of market expansion, and it is called “the industry scavenger” by the industry media. It is reported that at this stage, Foshan lighting LED products can be described as "in short supply", after the completion of the new workshop, Foshan Lighting's LEDT8 fluorescent lamp glass tube production capacity has exceeded 1 million / month. In the future, market share will be increasingly concentrated on brands, channels, and innovative companies. The industry will face reshuffling, and there may be a large number of SMEs withdrawing from the competition.

It is understood that many LED companies will have a big move in the past two months, under the premise of ensuring professional quality, will soon be caused by the shocking prices inside and outside the industry's attention. Relevant person in charge also said that following the bulb, the major actions of the Jingying series of lamps will also re-establish the industry benchmarks and standards, giving consumers greater benefits, while allowing the market's pattern to be more clear, which will help promote the promotion of the industry. The overall level.

It can be seen that with the further maturation of the LED market, resources will be further concentrated, and products and manufacturers that are not competitive will be quickly eliminated. The cost-effectiveness has long been a distinctive label of Foshan Lighting, and it is believed that companies with cost control capabilities and upstream resource advantages will bring continuous shockwaves to the industry and lead the field of LED lamp manufacturing.

Some industry experts pointed out sharply that each company is currently seeking strategic partners, and the stronger era of the stronger is approaching. The entire LED industry is now in the initial stage of integration. Last year, the number of integration projects was much larger than the actual number of successful M&As. More integration cases will occur this year.

"Reshuffle can achieve industrial integration." Zhao Kun, vice president of Xinli Lighting also pointed out that the reshuffle will certainly eliminate a large number of small-scale, lack of technical strength of the enterprise. After the closure of small businesses, resources such as equipment and personnel will flow to large-scale enterprises, which will be conducive to the optimization of the entire industry.

The market has "borderlines" and "oligopolistic structure" is looming. Over the past year, the LED industry has changed from the original confrontation between individual LED leading enterprises to the current horizontal and vertical integration among upstream and downstream enterprises. It is not difficult to see that the entire LED The lighting industry is accelerating from the former scattered development to focus, for companies with technology and capital strength, it also means that new opportunities and challenges. The dilemmas of the LED industry have intensified and the industry consolidation is just a matter of timing. For example, the alliance between NVC Lighting and BDO Runda is a typical example of LED lighting industry integration.

"With the failure of some companies in the LED industry, such as the breakage of capital chain and poor management, the entire industry will enter the consolidation stage and the intensity of shuffling will increase. This concentrated trend will intensify, and the top five will occupy most of the market share. The possibility is also very great, the future market share will be more and more concentrated to brands, channels, and innovative companies, the industry will face reshuffle, there may be a large number of SMEs withdraw from the competition.” Kun said.

"The future of LED must be an oligopolistic market. One of the big differences between the traditional industry and the traditional industry is that 'winners take all'." An industry source predicts that in the next five to ten years, there will be a dozen companies in the LED lighting industry. Emerging LED companies with asset sizes over a billion yuan; the formation of the first camp and second camp may occupy most of the market share.

Many industry experts suggest that the government's review of LED companies' access thresholds should be improved and that LED companies' tax burdens should be appropriately reduced. As for the government subsidy funds, the current situation is that there are no standards and no detailed rules, the organization is loose, there is no guideline for development, and companies are left to fend for themselves, but the government funding subsidy standards should be reformulated.

At present, the elimination rate of the LED industry is relatively high, large state-owned enterprises are entering, and small enterprises are withdrawing due to competition. Some industry insiders even asserted that there is a shortage of LED talent in the upper reaches of the industrial chain. Upstream companies need to be integrated. Many companies will certainly not survive this year. Shenzhen's LED companies will be reduced by 20%-30% next year, which means nearly 1,000 LED companies will die in the economic winter. The prediction of the chairman of Zhejiang University’s three-color company, Tong Yisheng, is that when the entire industry reshuffles, the remaining 300 companies in the country will suffice.

“The low threshold of the LED industry and the status quo of the industry leader may be the reason to attract them.” Chen Zebo, general manager of Mai Rui Optoelectronics, said that at present the entire LED industry is still lacking “big brothers” and has yet to emerge in the industry. Enterprises with market share can predict that China's LED industry will enter the oligarchic era in the next decade, and a group of leading companies will occupy a larger market share in the industry and become a well-deserved leader in the industry.