How LED companies have gone through "winter"

[Text|High-tech LED reporter Wen Zhao] After a few years of rapid development in the past few years, the LED industry is still in a period of rapid growth. Traditional lighting companies have fully transformed LEDs, and the LED lighting market has been completely opened to the mainstream. According to the statistics of the High-tech Research Institute LED Research Institute (GLII), the total output value of China's LED industry reached 344.5 billion yuan in 2014, a year-on-year increase of 31%.

According to the data, the penetration rate of LED lighting products has further increased. Since the market acceptance is high, why is there a miserable thing behind the prosperity?

The main reason for this is that there are more porridge. According to GLII data, the main industrial chain of LEDs totals 15,000 enterprises, including 51 upstream chip companies, 1,600 mid-stream packaging companies, and 13,300 downstream application enterprises. The downstream application value is 275.7 billion yuan. According to this data, the average revenue is only 20 million. The market is completely unable to support the survival of so many enterprises.

For this reason, we often use the “arms and horses chaos” to describe the current LED market. A large part of the enterprises are rushing to “brightness”, but they don’t know that the market is so “blood and rain”, and many people eat cakes, leading to the industry. Chaos and disorder, fierce competition, product homogeneity, and the lack of distinctive enterprises naturally fall into the vortex of price wars, setting off the "butterfly effect" of price wars in the market.

These problems not only affect the profitability of LED companies, but also affect the healthy and orderly development of the entire industry. How long will the “winter” of the LED industry last?

This issue is still inconclusive. The optimists say that spring is coming. The pessimists say that this is a medium- and long-term winter, far from spring. However, it is certain that 2014 is the watershed of the LED industry. It is the transformation of the LED industry from barbaric growth to maturity. The pattern of “stronger and stronger” is emerging.

In 2015, the market competition will be more intense, and the reshuffle of the LED industry will accelerate. Not only enterprises, parts factories, logistics companies, distributors and even industry media are spared. Enterprises that lack vitality and competitiveness will Enterprises that are quickly eliminated, and whose products are distinctive, have certain brand recognition and channel advantages, can finally survive.

"The next three years will be the golden period for the development of the LED industry. At the same time, the market competition will be even more fierce. In the future, especially this year will be the year that determines the life and death of enterprises." Dr. Zhang Xiaofei, Chairman of Gaogong LED, believes that the LED industry has entered a revolution. In the big era, what kind of strategy should be developed to survive and develop is an urgent problem for every enterprise.

GLII predicts that in 2015, LED industry enterprises will drop from 15,000 to 14,000. This year, the market competition will become more intense. The collapse of large and medium-sized enterprises and even listed companies in the industry will increase. At the same time, the strong and strong trend More and more obvious, taking the upstream chip as an example, the proportion of the top five enterprises' production value in the whole industry has increased from 50% in 2013 to 57%. In 2015, this proportion will further increase.

There is no doubt that the LED industry has begun to enter the capital era. The capital strength of listed companies will highlight a huge advantage in the LED lighting era, and traditional lighting brands will take advantage of brands and channels to further erode the living space of emerging companies. The emerging LED companies that live in this double attack will leave their own names in the LED lighting era, and the industry landscape will gradually emerge in 2015.

The "winter" cold made the LED lighting industry in the impetuous gradually return to rationality, ending the "Great Leap Forward" development era. Resource optimization and integration, perfect product layout, stable optimization of channels, and enhancement of corporate core competitiveness have become the mainstream thinking of the lighting industry. The battle of LED lighting is like sailing against the water. If you don’t advance, you will retreat. Fortunately, most companies face the off-season of the market, adjusted their mentality in time, and did not lose confidence.

"In fact, LED has a very broad application space and opportunities." Lin Jiliang mentioned such a set of data, the global lighting market has reached 160 billion US dollars, and the scale of LED lighting is growing step by step, with globally installed lighting products, LED The penetration rate has gradually increased year by year. Not only is the volume increasing, but even the increase in revenue is constantly improving. Moreover, LEDs can be used across many other industries, which also gives the future of LEDs unlimited possibilities, and we are full of hope in it. In this regard, Gong Wen said: "If the development of a new blue ocean, the LED industry market will multiply."

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