LED market: radishes must be washed soon

Two sets of LED daytime running lights were purchased from the Internet and one group was not used for one month. My heart was very upset and I went to the store to say something. The shopkeeper was rather happy, and there was nothing nonsense that promised to change the group, but said it could not guarantee how long it would take for the lamp to change. This again made the author unhappy, saying that he must return to other homes to buy. Did not expect the store is still happy, replied that even if you search through all the online stores and physical stores, and no one dares to guarantee you how long it can be used, because the entire Chinese LED market is like this.

The so-called "all this" is the quality of domestic LED products are not rampant. Although the author had some suspicions, I thought I would soon find evidence that there was a park near the residential area. Last fall, park managers installed two rows of solar LED street lights on both sides of the main road. It looks quite beautiful. It was not long before these lights went out and went out. It was less than a year until now, and almost half of them did not light up.

Perhaps precisely because of "all of this", the domestic LED lighting industry is now facing a wave of closures, many companies are like the park's streetlights that close every other day, according to this trend, it is likely that there will be almost half of the company forever The ground is not bright. In fact, due to the declining domestic LED market, Taiwanese companies have also begun to be linked. Large companies like Kellett Optoelectronics, which once had good returns in the industry, are now reported to be out of business.

Well-known sunrise industry, this is just starting a few years, how can we say no, we can't do it?

The reason is actually very simple. In 2009, the impact of the global financial crisis is swift. In order to expand domestic demand, the Ministry of Science and Technology has launched the “Ten Cities Ten Thousand” semiconductor lighting application demonstration city plan. It plans to use the public lighting of 21 cities including Beijing, Shanghai and Shenzhen as carriers to vigorously promote the LED industry. Since then, the development of the LED industry has entered the fast lane, policy subsidies have been given one by one, and everything from upstream equipment to downstream applications has become readily available. The LED industry has also become a branch-based small industry in the semiconductor industry and has become a key training or pillar industry in many localities. The high profit, low threshold and continuous good policy guidance of the LED industry have not only brought a large number of gold diggers but also brought chaos in the industry. The first three years, the LED industry's profits as high as 20% to 30%, but later because of a swarm of influx into the company too much profit is soon diluted, and now only about 5% of the net profit can be earned.

According to statistics, in 2012, the scale of LED companies in Guangdong alone had reached 4028, which was more than 1,000 in the total national scale at the end of 2009. Nationally, the number has soared to more than 6,000. If so many companies come to share a cake with a limited amount of energy, can they not rob and rush? The fierce price war is inevitable. The 1-watt LED chip price was about $3 two years ago, but it has now fallen to less than $1. Slight profits have led to the closure of a large number of LED companies following the trend.

As the saying goes, the radish will not wash the mud. The LED market has been out of control of expansion, and a large number of companies are engaged in melee. In order to survive, some (or even the vast majority) of companies have to give up quality requirements, and poor quality products flood the market. Earlier this year, the Guangdong Provincial Bureau of Quality Supervision conducted spot checks of LED street lamps and light source controllers in the local market. The results showed that the product pass rate was only 60%.

The strange thing is that even if the current LED market is saturated, and there is a serious overcapacity phenomenon, and there are continuous business failures, there is still a large amount of capital to join. For example, Xishan Coal, Furi Electronics, and BYD are investing in this area. The LED industry's enterprises are in a converse trend to expand production, and there are unrelated companies entering the LED industry. This will inevitably lead to further aggravation of excess production capacity and further deterioration of market competition.

However, if viewed from another perspective, this is not a bad thing. The more fierce market competition is, the easier it is to form an industry reshuffle. In the future, LED companies will face cruelty and survival of the fittest. Only a few companies can grow, and those speculators and non-strength companies will inevitably die out like unqualified LED lights. Market share will be more and more concentrated in brands, channels, and innovative companies. But no matter what, in order for a company to survive in this market, one thing must be kept in mind: Radishes will have to be washed soon. You know, without quality assurance, any company is not far away.