With the increase in the penetration rate of LED lighting, product prices continue to decline. In order to obtain more profits, LED companies have expanded their production lines, intending to achieve small profits but quick turnover by stimulating demand.
Here, especially in the low-end market of the LED industry chain, it is the hardest hit area with excess capacity. As the LED green energy manufacturing industry that used to be a sunrise industry, why is this kind of dilemma frequent?
Overcapacity crisis
Taking LED upstream as an example, under the double stimulation of market environment and government subsidies, the production capacity continues to expand. Most enterprises dilute the production cost by expanding the production scale, and lower the price in exchange for market share, resulting in the continuous decline of LED chip prices. Insiders of one of the top three chip companies revealed.
Since last year, with the continuous expansion of domestic Sanan Optoelectronics, Huacan Optoelectronics and other chip factories, coupled with the slowdown in the growth of LED lighting demand, industry competition has intensified, as the most upstream chip of the LED lighting industry chain also felt the pressure.
And this year, under the current situation of domestic LED companies generally increase capacity expansion, Jingyuan Optoelectronics, Samsung Electronics, CREE and other international companies have made the decision to selectively reduce production, in order to alleviate the current situation of the LED industry supply and demand imbalance and price decline The pressure shows that overcapacity has become a major obstacle to the development of the LED industry.
“Extension to the middle and lower reaches, why is there overcapacity? The industry's low barrier to entry is an important reason, and it is also difficult to solve at present.†Sun Shaofeng, director of marketing for Mulinsen lighting, said.
At the beginning of this year's opening year, the “Recall Gate†pushed the quality problems of Chinese manufacturing to the forefront. More than just “recalling the doorâ€, on January 22, the General Administration of Quality Supervision, Inspection and Quarantine announced the results of national supervision and inspection of 34 kinds of product quality such as LED in 2015, and the detection rate of unqualified lighting products was 28.8%.
Judging from the problems exposed, on the one hand, the enterprises that are the main players in the market do not strictly follow the relevant standards in the R&D, manufacturing and production of products; on the other hand, they also reflect the lack of national standards and the testing and certification system. Perfect, market chaos, and uneven product quality.
"At present, the overcapacity of the LED lighting industry is a relative phenomenon, mainly due to the overcapacity of inferior products lacking quality assurance, resulting in the gradual emergence of 'bad money to drive out good money', resulting in a low quality market share of reliable and cost-effective LED products. "Pang Guiwei, chairman of Tongpu Technology, mentioned.
Lack of high-end products
On the one hand, LED companies compete at low prices, and the market is bleak. On the other hand, high-end LED products still need a large amount of imports. What lies behind the import data is the flaw in the shortcomings of LED high-end products.
"Many of our companies have not done enough in the development of technology. Therefore, the overcapacity in the current industry is a surplus of low-end overcapacity, homogenization, no technical threshold, and mutual imitation plagiarism. Wang Jing, CEO of Jingneng Optoelectronics, said.
In fact, in the high-end market of LEDs, there has never been a surplus. The large number of imported products abroad actually shows that there is no surplus in the high-end products field, but it is lacking. Most people in the industry also agree that there is such a situation.
According to Wang Min, high-end products that rely on imports are mainly concentrated on high-power products. “There are not many enterprises that can do high-power in China, especially those with higher requirements, such as street lamps, car lights, and mobile phone flash lamps. Depends on imports."
In the upstream chip field, especially high-power chips, domestic LED companies still have a certain gap between technology and international companies. "In terms of packaging and application, the technology of our domestic products should be synchronized with international companies, or advanced. But on the chip side, domestic companies still need to catch up."
Indeed, the increasingly rational LED industry, in the technology has not yet reached full maturity, the overcapacity is still too far away, LED is still in the stage of rapid development, domestic companies need to further improve the technology.
Shenzhen Priva Tech Co., Ltd. , https://www.privaled.com