Domestic LED industry has entered the era of low profit

Statistics show that the number of domestic LED lighting companies has exceeded 10,000, LED application companies nearly 7,000, and most LED lighting business personnel from traditional lighting companies turn over, because of the shackles of the mode of thinking, most market strategies using the layout of the terminal channel market To join dealers based. Some industry insiders predict that the LED industry will be closed down next year, and companies will invest in the downstream. After experiencing investment booms and price cuts, the domestic LED industry is entering the era of low profit.

LED industry output will reach 205.9 billion this year

Although the tide of price cuts has already hit, the investment in the LED industry remains unabated. It is expected that by the end of 2012, the total output value of the domestic LED industry will reach 205.9 billion yuan. The report shows that in 2011, the total number of domestic MOCVD equipment was 803 units, and in 2012 it reached 917 units, an increase of 114 units. Despite the acceleration of major equipment investment, the output value of domestic chips has only increased by 20% this year, while the price of sapphire has dropped by 35% year-on-year, and the price of LED chips has fallen by 32% year-on-year.

From the overall perspective of this year, the status of the upstream sector has actually improved, mainly due to the increase in the proportion of investment in downstream applications in the second and third quarters, a large part of which comes from the investment of traditional lighting companies to the LED industry. . From the perspective of the entire upstream investment, the growth rate of the epitaxial wafer investment has dropped from 46% last year to 10% this year, while the investment growth in the downstream application area was 21% last year, rising to 53% in 2012, so the LED industry investment focus Transfer from upstream to downstream.

It is difficult to compete for distributors

At present, excellent dealers in various provinces in China are scarce resources and are still monopolized by traditional lighting companies. The second and third-tier lighting dealers are affected by the regulation of state real estate. The days are even more difficult. As far as the Shenzhen market is concerned, since July of this year, some dealers in the building materials market have been withdrawing due to capital chain breaks. For example, art dealers withdrew from the 6th, another withdrew from the 3, and Huaqiangbei LED procurement center. The average monthly withdrawal of two and so on. Obviously, when the lighting distributors in the country are facing the cold market, traditional lighting companies and LED lighting companies have to seize the end market, and the result must be the channel for most companies to die.

Since last year, LED export enterprises have turned to domestic sales due to sharp drop in orders. For LED lighting companies, entering the terminal channel market either finds franchisees or directly enters terminals to open branded outlets. However, it is very difficult to develop franchise dealers. Most lighting dealers choose LED lighting companies to be more cautious. The reason is that the terminal market is flooded with inferior LED products, and there is no real LED brand in the terminal market.

Provoke price war to build brand

At present, there are too many LED companies in the market, and some companies have provoked a price war. If they want to eliminate their opponents and land on the beach, the representative is Mulinsen. Mulinsen's 3W bulb lamp gives the dealer a price of 8 yuan, and the distributor sells the terminal at a price of about 14 yuan. The price of the Mulinsen 3W bulb lamp is already very close to the price of the 5W energy-saving lamp on the market. It poses a threat to 5W energy-saving lamps.

The looting of the terminal market around lighting dealers has become more intense. The rectangular lighting adopts the exhibition board mode to open the door of the dealer. As long as the dealer is willing to sell the rectangular lighting products, they send the exhibition boards, prepare the model, and do not need the distributors to press the stocks. The sales are completed and then delivered to the door.

Pros and cons of government subsidies

In the past few years, under the promotion of energy-saving and emission-reduction policies, various local governments have vigorously supported the development of the LED industry and issued many preferential policies for the industry. Zheng Tiemin believes that many local governments have made blind decisions and made many unrealistic grand plans. Throw out tempting preferential policies, including giving away land and factories, attracting many companies to invest, which is also an important cause of excess capacity in the industry. the reason. However, different views also exist. The national government subsidy policy is a very effective means to promote the development of emerging industries. This model is not Chinese characteristics. Many foreign companies have received government subsidies up to now.

The government introduced a subsidy policy to provide enterprises with R&D subsidies and R&D input subsidies that not only can promote the advancement of new technologies, but also stimulate the market to form mass production, promote the decline of raw material prices, and provide better support for the development of the LED industry. The starting point of the government's subsidy policy for LED companies is to allow a small number of companies to drive the entire industry, spur a new growth point for energy conservation and emission reduction, and promote the LED industry to develop in a better direction. The subsidy policy itself has no problems. The key is to look at each How do companies manage to use government subsidies?