LED product price reduction is still no city domestic LED industry chain is extremely asymmetric

General Electric Chairman and CEO Immelt has repeatedly repeated "green is green" (green is the US dollar) on many occasions. In the era of the global “green economy”, the emerging green high-tech industries have undoubtedly become the prey of capital competition, and LED is one of the most shining “stars”.

However, this year, the LED industry, which once had a lot of glory, has fallen into the quagmire of “overcapacity”, “price drop”, “lack of core technology” and “no market access standards”. The industry is frank: LEDs are “cold and cold”.

Asymmetrical industrial chain
Replacing incandescent lamps as a new light source, LED is hailed as the last straw, and the entire LED industry will be in the field of lighting.

At the beginning of August, the National Development and Reform Commission promulgated the "China Roadmap for Phased Elimination of Incandescent Lamps" for drafting opinions. From October 1 next year, it is forbidden to sell incandescent lamps for general lighting of 100 watts or more; from October 1, 2014, sales are prohibited. Tiles and above incandescent lamps for general lighting... From October 1, 2016, it is prohibited to sell and import incandescent lamps for general lighting of 15 watts or more.

The elimination of incandescent lamps has injected a dose of “strong medicine” into the LED industry. The investors who come here can be described as “following the enthusiasm”. According to statistics, the investment from non-LED companies entering the LED industry in January-July has become the LED industry. Obtaining an important part of the investment, such projects account for more than 45% of all investment projects, and the amount exceeds 65% of the total investment amount.

Recently, only listed companies such as Dehao Runda, Dazu Laser, and Konka have made large-scale acquisitions or capital injections for a number of Shenzhen LED companies; Sanan Optoelectronics spent 2.5 billion yuan in the construction of the plant; Lehman Optoelectronics, Chau Ming A number of LED companies such as technology have announced their involvement in LED lighting. However, under the grand blueprint for the development of the Central Plains in the Central Plains, the hidden worries behind the prosperity have also surfaced.

The upstream part has always been an area favored by capital, and the surge of capital can even be described as “crazy”. CSA data center statistics, from January to July 2011, China's LED industry plans to increase investment totaled 125.618 billion yuan. The upstream substrate and epitaxial chips are still the focus and hot spot of investment, reaching 20.748 billion yuan and 36.796 billion yuan respectively. , accounting for 16.52% and 29.29% of the total investment. The number of MOCVDs that have been clearly planned for investment projects in epitaxial chips has reached 1,266, which is four times the current domestic holdings.

This year, the biggest move is Inner Mongolia Mengxi Group. This traditional cement manufacturing enterprise in the Ordos Plateau will invest 27.5 billion yuan in the next five years for the production and research and development of LED products. Its wholly-owned subsidiary Hua Yanxin Light (Beijing) Technology Co., Ltd. is responsible for implementation.

For some large companies, the local government “loves and adds”. Sanan Optoelectronics announced on September 28 that it plans to invest 2.5 billion yuan to develop and manufacture sapphire substrates in Quanzhou, Fujian. For this project, the Anxi County Government of Fujian Province granted a series of preferential support measures. Within 5 days of the commencement of the civil engineering project, a special incentive fund of 300 million yuan was granted.

“The government subsidies are very high. The upstream MOCVD and epitaxial furnaces have subsidies from local governments, which also gives investors a good reason,” said Zhang Xiaofei, director of the High-tech LED Industry Research Institute, in an interview with the reporter.

Compared with the upstream blowout type, the downstream is much deserted, which can be said to be "cold attack."

According to the statistics of the High-tech LED Industry Research Institute, from January to July this year, the average price of LED chips was reduced by 25%, and the maximum price reduction was 42%. The average price of LED packaging was 23%, and the maximum price reduction was 37%. The average price reduction of LED applications also reached twenty one%.

However, the market has performed very "not to force", and environmentally-friendly and durable LED lighting products have fallen into the embarrassing situation of "price reduction is still no market".

“The price decline is related to the overcapacity in the upstream. However, the decline is still running at a high level. The downstream is still unable to digest. The upstream investment is too blind and too optimistic for the future market. The investment scale of the whole industry is very large. It is 11 times the demand." Zhang Xiaofei said helplessly.

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