Foxconn big action layout LED enclosure orders correct

On January 6, Foxconn Technology Group's optoelectronic industry base officially entered Henan Nanyang, the third project base of this global IT foundry giant in Nanyang. According to the plan, the base will mainly produce and sell LED energy-saving display and LED lighting products developed by Foxconn.

According to the reporter's understanding, the first phase of the project will invest 150 million yuan, with an annual output of 300,000 sets of lamps and lanterns, and annual sales income of up to 2 billion yuan. At the same time, there are six local cooperation projects, including LED cooperation projects; urban roads LED street lighting energy-saving contract energy management cooperation projects; city LED street lamp contract energy management services; Foxconn, China Optical joint venture projects; SMT technical training Project; mold mechanic training project.

This is another major LED project invested by Foxconn in the Mainland after Wuhan, Chengdu, and Hengyang.

"Although Foxconn has investment LED in many places in the country, you simply can't see what they have in the market." When Gaogong LED reporter researched Foxconn LED projects, many LED manufacturers reported to Gaogong LED reporters. disclose.

However, as far as the reporter knows, Foxconn’s LED business revenue mainly comes from local government orders, brand OEMs, and lighting replacement at Foxconn factories. In addition, Foxconn is also embarking on a self-built brand that sells in some major supermarkets and home cities. From the Foxconn Lighting official website's project case display page, we have seen nearly 150 large and small engineering projects including the Yangtze River Tunnel, Hyundai Motor Plant, Shenhua Group, Guangzhou Baiyun Airport, Chengdu Shuangliu International Airport, and Mengniu Liquid Milk Factory.

"In fact, the Foxconn LED project entered the capital operation stage very early." Xie Yongjun, chairman of Jiuzhou Optoelectronics, told reporters that with the development of LED lighting, Foxconn is also gradually shifting its focus to the inland and launching a national circle. To exercise.

Enclosure orders are correct

Since Foxconn was forced to “pay”, along with the plan of the group's overall migration to the Mainland, the company’s LED projects will naturally also be transferred to the Mainland.

Shortly after the formal signing with the Nanyang government, Zhengzhou City also decided to allocate 7,500 mu to the Foxconn Aviation Industry Park, some of which will be used in the LED production line.

Li Huanqiang, marketing manager of Huahai Group, stated that Foxconn's investment in LED projects is not aimed at investment profits, but rather on preferential land policies. "Foxconn has been making LED displays for three years, but there is not much progress in the market at present, and its technology is still stuck in the P2.8 three-in-one surface mount stage." He said that Foxconn has a huge real estate business in China, With LED as the project, land support from local governments can be obtained quickly, which is undoubtedly the biggest part of the interest chain.

This is also reflected in the Foxconn LED project in Wuhan.

An industry insider who declined to be named told reporters: "Foxconn's inland migration plan has become the capital's bargaining chip for the government. Gou deliberately released the local government's rush for the Foxconn project landing, thus exerting pressure on other target areas. Finally, The result of the game is to see which local government gave the subsidy the best."

Land is undoubtedly the biggest cake to lure Foxconn, and changing investment orders has become a wonderful means of Foxconn's LED performance.

"Don't take part in market competition and don't worry about product quality. Foxconn enjoys the fruits of government projects." According to a reporter from R&D who worked at Foxconn for many years, the company's engineering projects, other lists are small, and government projects The largest list of items, the largest profits.

This time in Nanyang, Foxconn has gained a lot in terms of land. Project orders are also fruitful. According to the reporter, in addition to the above-mentioned several LED cooperation projects can be seen in clues. There are more than one million street lights in Henan Province. If all of them are replaced by LEDs, the market can be huge. Therefore, investing in Nanyang, it is not difficult to see Foxconn's ambitions for the LED street lamp market in Henan.

It is not a special case of Foxconn to initiate an enclosure campaign with LED and obtain government orders.

According to the reporter’s understanding, after the investment of some international giants, the actual progress in actual production is not obvious and the results are not as expected. What was even more shocking to reporters was that there was no shortage of shell projects on the market. According to a person familiar with the matter, when there is an LED government project, manufacturers will transfer products from other regions, or simply assemble them locally to fill the facade. Some of them are simply ordering other manufacturer's material devices and then simply assembling them.

Li Huanqiang said that the main purpose of these international giants to invest in LED is not to rely on LED profits, but on the grounds of the LED project, launched the enclosure movement in the country, access to government orders and land preferential policies.

Target directly to LED manufacturing center

"Foxconn invests in LED in many places, but their products have a very low exposure in the market." When reporters were looking for Foxconn products in the market, a number of companies in the industry told Gaogong LED reporters. According to a researcher who has worked at Foxconn for many years, Foxconn currently has two brands in LED, one is Hon Hai Group's FIT in Taiwan, and the other is Foxconn's own brand, but they are mainly based on OEMs. .

However, the above-mentioned sources said: "Whether it is the enclosure movement or the exchange of investment orders, Foxconn is preparing to become the world's largest LED lighting foundry."

In an interview with reporters, Terry Gou said that Foxconn has shifted its LED core technology and related industries to Nanyang, and gradually established Foxconn's LED manufacturing center, and further developed into the largest LED manufacturing center in China. According to GLII statistics, the global LED lighting market has a capacity of more than 200 billion RMB in 2015. Nanyang's investment will undoubtedly become a leap for Foxconn to enter the LED business.

In fact, in recent years, Foxconn has quietly laid out its LEDs throughout the country to strengthen its penetration into the industry chain.

Among them, in the upstream area, Foxconn chose to cooperate with Japan and Japan to obtain LED beads at a price lower than the market price; subsequently, the parent company Hon Hai Group entered into advanced optoelectronics and expanded 50 MOCVD equipment to fill the company's LED chip manufacturing. Blank; and in the packaging field, in 2009 Foxconn acquired Chi Mei, and obtained independent production rights in packaging, LCD display, and semiconductor equipment. In the downstream area, the Group's Peixin Semiconductors is responsible for the R&D, manufacturing and terminal sales of LED street lamp modules. The Hon Hai Precision Group, which is part of the Hon Hai Group, has also expanded its LED division and is responsible for the assembly of LED street lamp heat sinks and LED street lamps.

In the layout of the LED industry chain, Foxconn has also made gains in the foundry business. In 2009, Foxconn started to provide OEMs for Philips, General Electric and other international lighting giants. According to insiders, the LED OEM sales of the two major manufacturers, Philips and General Electric, exceeded 200 million yuan.

The huge supply chain and supporting facilities system just supported the Foxconn LED OEM road.

"The core of Foxconn lies in the supply chain, and there is a complete set of supporting facilities for logistics and transportation. They are pursuing big and stressing the whole." The insider revealed that Foxconn has sub-factories in many regions of the country, once LED enters This network is followed by many vendors. Foxconn can quickly purchase LED parts and equipment through the existing channels.

Take Nissan 140lm lamp beads as an example, the normal price in the market is 1.3-1.5 US dollars, and Foxconn got the price less than 0.8 US dollars. By 2009, they can get the price of 0.6 US dollars, and any other manufacturers in the market do not have this. Kind of discounted prices. "Although there is not much movement in the LED terminal market, Foxconn actually has all the elements of producing LED internally." The source said that the advantage of the huge supply chain system lies in the price.

However, Foxconn, which is known for its OEM model, manages its own brand. Feng Jun, Chairman of Shenzhen E-light Lighting, has his own opinion: “Foxconn can make IPHONE and IPAD, but he must not make IPHONE or IPAD. Brand." Foxconn has been the label of OEM for a long time. No matter what it does, Foxconn is only a brand of OEM. In the LED field, he can only do LED with cost advantage.

"For Foxconn, the product brand may not be important. Being the world's first-generation factory is the most important, and it is also true in the LED field." Feng Jun said. In his opinion, what Foxconn is best at is mass production, and the most reasonable control of labor costs and material costs. "Although we do not see Foxconn LED lighting products in the market, in fact, Foxconn is everywhere."

The timing of mass production is not ripe

According to the statistical data of the Institute of LED Industry of Gaogong Industry, the amount of investment in China's LED industry in 2011 was 194.5 billion, and a total of 132 investment projects with an annual scale of over 100 million were added. However, the penetration rate of the global LED lighting market is still less than 5%. At this stage, most LED lighting companies still only have sales of millions or tens of millions.

"Foxconn's greatest advantage lies in its production, automatic production lines, complete facilities, large-scale mechanized copying, and maximum control of costs." Liu Wei believes that Foxconn has a large supply chain network, including raw materials and equipment. Great advantage. Through large-scale production, the price can be greatly reduced.

Moreover, falling eye costs is one of the bottlenecks for LED manufacturers to seek market breakthroughs.

However, Feng Jun told reporters that the LED lighting is not mature, the product has not been stereotyped, so at this stage is not suitable for large-scale production and manufacturing. He said: "If you do, at least in 2015, when market demand is completely released, large-scale production will have a cost advantage."

Taking LED display as an example, Foxconn's technology currently only stays at the P2.8 three-in-one labeling stage. As early as March of 2010, the market has already launched P2 technology, and many manufacturers have begun to apply it now. Under conditions of immature technology, large-scale production is tantamount to leaving hidden risks for OEM brands.

In addition, the pursuit of personalized design has always been a major potential advantage of LED lighting, which is inconsistent with the traditional mechanization of lighting and other electronic products.

Feng Jun said that LED lighting is in the early stages of development, LED flexibility, variety, variety of styles. At present, the product has not been finalized, and it is highly flexible and innovative. It also poses challenges to mechanized operation.

The table shows the Foxconn investment LED projects in recent years

city

project

Investment situation

Chengdu

LED-TV , LED backlight module, LED package and lighting production line

In 2009 , invested 1 billion US dollars

Wuhan

LED project

In 2008 , the first phase of the project invested 1 billion U.S. dollars

Jinan

LED lighting, package, large LED display

In 2009 , invested 500 million U.S. dollars to obtain orders for LED lighting projects from Beijing-Shanghai High Speed ​​Rail

Hengyang

LED series products

In 2011 , the investment was 100 million yuan, and the planned factory land reached 2,000 mu.

Xiamen

LED backlight, panel factory

In 2009 , 30 billion yuan was added to establish Xiamen Optoelectronics Project

Nanyang

LED lighting and LED energy-saving display screen

In 2011 , the plan covers an area of 600 mu, with a total investment of RMB 1.9 billion

Foshan

LED display

Foxconn LED display production base transferred to Foshan.