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Faced with the overall downturn in the LED industry, the country is about to start a new round of subsidies. At present, the latest list of LED lighting subsidies for the 2012 and 2013 financial subsidies has been released, a total of 39 won the bid, and almost the mainland manufacturers won the bid.
Although the specific subsidy method has not yet been officially introduced, it seems to indicate that a new round of market explosion is coming soon. Many companies have said that they are not so optimistic.
Subsidy for terminal
On July 18, the tendering agency China Electronics Import and Export Corporation issued a statement saying that the “2012 fiscal subsidy promotion project for semiconductor lighting products†organized by the Ministry of Finance, the National Development and Reform Commission and the Ministry of Science and Technology, due to major changes in national policies, etc. The procurement targets set in the bidding documents are no longer able to meet the new requirements, and tenders will be organized separately in the near future.
In the new tender notice, it was clearly pointed out that the tender was “to implement the State Council’s consumption policy for energy-saving appliances and other productsâ€. Some insiders said that the total amount of this round of bidding subsidies is expected to reach 1 billion yuan.
This tender selects a batch of semiconductor lighting (LED) products manufacturers, products, and determine the supply price. The subsidy funds are indirectly subsidized, and the financial subsidies are given to the winning bidders. The winning bidders then sell the products to the end users at the price of the bidding agreement minus the financial subsidy funds. The ultimate beneficiary is the end user.
A total of 110 companies participated in the bidding, but some of the on-site quotations were daunting. The quotation of the same paragraph is very different. The highest quotation and the lowest quotation of the two types of LED street lamps are 10 times. Taken together, the average price of 10 types of products is 10~20 yuan/watt, which is lower than the mainstream price. The original intention of the tender is to open some terminal markets through subsidies, but some insiders have said that such a low price may have a bad demonstration effect on the market.
The industry believes that in the initial stage of market launch, government subsidies will definitely help to expand the market, and will have a certain pulling effect on the entire industry chain. However, neither enterprises nor local governments can use subsidies as the only means, because the types of enterprises and products that can receive subsidies are only a small part. To occupy the market, it is necessary to rely on technological innovation, brand and channel construction.
Overcapacity
A number of LED chip manufacturers, supporting equipment manufacturers and agents interviewed by the reporter all said that the sales in the most recent year were almost halved compared with the good times in previous years. According to Chen Yong, director of product management of Guangda Optoelectronic Equipment Technology Co., Ltd., only 50% of domestic production equipment is currently open.
But at the same time, they also believe that the demand for the LED market in the sunrise industry has not declined, but the overcapacity in the domestic market far exceeds demand.
The current overcapacity of LEDs goes back to 2009.
As a branch of the semiconductor industry, LED is not a big industry. It is mainly used in the backlight field of small-sized mobile phones and notebook computers. The annual market growth rate is about 10%.
2009 is a watershed, and Samsung has begun to push LEDs into the field of TV backlighting. Each TV set will consume hundreds of LEDs, and the sales of hundreds of millions of LCD TVs a year will bring about an explosion in the LED market.
“In the two years of 2009 and 2010, the market has grown by 50%, which is unprecedented.†Yan Faxin said. 　
LED "subsidy" market and "excess" capacity forced SMEs to withdraw?
“National subsidies have no fundamental effect on changing the status quo of the market itself. It can only be scratching.†Recently, at the “2012 China LED Manufacturing Technology Forumâ€, SEMI China senior analyst and LED project manager Yan Faxin said.