LED Industry Consolidation Incoming Tide And Orderly Market Competition Will Return

Chip LED chip is a compound , the compound ( specific spectral components as required to determine emission ) of arsenic , gallium , indium , and nitrogen and other elements of the sapphire epitaxially grown on the substrate out . Currently commercially available LED chips , the basic material to ALGaInP ( AlGaInP ), InGaN ( indium gallium nitride ) -based. Where: red, Huangguang Jing sheet material is ALGaInP; blue, white , green chips are made of InGaN.

With the outbreak of the LED lighting market is approaching the point , industry competition , industry consolidation continues to deepen , the trend will be more prominent. Enterprises through mergers and acquisitions, integration of resources , combining the complementary strengths in order to enhance the overall strength of a competitive advantage in the market really broke out . Since September 2012 , the industry has undergone major consolidation mergers 6 onwards , amounting to 4.095 billion , involving the three places , mostly joined forces to complete the production , distribution, patents , human resources and market integration.

Integration Tide Coming

As early as 2006 to 2007 years , LED industry in Taiwan on the adoption of the merger , reorganization formed a complete industrial chain and several giant industrial pattern side by side . In recent years, the state actively support, the rapid development of mainland China LED market , industry competition , began to differentiate between the companies. Facing the market , especially in the lighting market expansion soon, through mergers and acquisitions, integration of resources , combining the complementary strengths in order to enhance the overall strength of a competitive advantage in the market really has become the consensus of the outbreak of many businesses .

In 2013 , the industry has entered a critical period of consolidation , collaboration model requires multilateral cooperation between enterprises vertical and horizontal chain . 2012 upstream capacity of structural overcapacity, increased competition , mergers and acquisitions to some extent, reduce duplication of investment , reduce vicious price competition, the two sides to enhance the overall ability to withstand risks . On the other hand , on the outbreak of the lighting market expectations, many companies choose to complete capacity through mergers and acquisitions , channel , patents , human resources and market integration.

"Matthew Effect " Accelerated

Recent speculation of cross-strait LED manufacturers exit the message , in addition to Taiwan Kellett , Chinese manufacturers pumping more money due to banks , including Hung Kee lighting, Shenzhen Shifang face closure. Everlight chairman Yeyin Fu bluntly , LED lighting plants and energy-saving bulb factory , like before , there vendor consolidation tide , now just the first wave, will go to when not sure , but it should allow the industry towards a more healthy development.

Yeyin Fu pointed out that before the launch of energy saving light bulbs , but also took place three times a vendor consolidation tide , then lasted about 10 to 20 years , only to energy-saving light bulb industry gradually toward health , and successfully replace incandescent bulbs, LED lighting is also now walking such a trend, and now this wave of closures have occurred in low technology and small- capitalization firms .

Expected , as the industry has entered the high-speed growth, brands and channels combined , the depth of the consolidation trend in the industry chain will be intensified in recent years , Matthew will soon appear.

The Advantages of Integration

Competition in the expanding market for regional and enhance core competitiveness, such as the acquisition of BDO Runda NVC , three optical acquisition of U.S. equity Luminus, Taiwan Formosa Epitaxy and so on. Through vertical integration integrate acquisitions , corporate get through the upper, middle and lower reaches of the whole industry chain , to achieve the overall layout . Followed by cross-border mergers and acquisitions, encourage enterprises to carry out cross-border mergers and acquisitions are an important driving force for patents and international markets , LED patent lies in the long-term international giants in the hands of a few large , especially chip links, through the acquisition of foreign companies can circumvent patent barriers , access to international manufacturers patents support.

Integration is power, and mergers and acquisitions is undoubtedly an effective way of resource integration in the economic globalization today has become quickly realized capital accumulation , possession of resources , an important way to market expansion , industry consolidation is behind all sorts of resources further to the advantage of corporate concentration, thus showing the survival of the fittest to survive . Only through the baptism of Ebb Tide , in order to make the entire industry more healthy and orderly development , integration is a necessary process industries , by industry professionals sentence : "LED lighting journey , turn over is an oasis . "

Industry Group Inflection Point Almost

Upstream chip market : in 2012 , the overall size of China's semiconductor lighting industry reached 192 billion yuan , an increase of 23 % compared to 2011 's 156 billion yuan , the growth rate has slowed down and become in recent years the domestic semiconductor lighting industry lowest rate of the year . Which the scale of the upstream epitaxial chip package midstream and downstream applications were 80 billion yuan, 32 billion yuan and 152 billion yuan . Among them, the 2012 domestic enterprises chip revenue growth of 23% , to 80 billion yuan; 2011 domestic GaN chip capacity utilization at about 50% , the annual output was only 115 billion , output growth was 63% , much larger than the value growth . Overall, the localization rate of 72% of the chips in lighting applications has also made ​​great progress , especially the competitiveness of small and medium -power lighting applications homemade chips gradually revealed , although lighting chip market share is still low , about about 25 %, but in 2011 17% compared to a big increase .

Midstream package : in 2012 , China's LED packaging industry reached 32 billion yuan , compared with 28.5 billion yuan in 2011 , up 12 % from 2011 production of 182 billion to 241 billion , an increase of 32%. From the product structure , SMD-LED package most obvious growth , accounting for about 50 % of the total production of LED devices , LED packaging has become a mainstream product . 2012 focused on small- size backlit Jufei and dedicated large-size backlight Ruifeng power dominate , 2013 is expected to continue .

Downstream applications : in 2012 , the overall size of China's semiconductor lighting applications reached 152 billion yuan , the overall growth rate of 24% , is the fastest growing part of the whole industry chain, but a more significant reduction in product prices influence growth has become in recent years a minimum. Lighting applications where output growth of 40% to 28% of the market share continues to be the largest market share of applications. LED lighting products yield more than 300 million , the rapid increase of domestic demand , exports decreased proportion , 56% ; backlighting applications increased 32 percent , accounting for 19 % of the total value of applications ; most mature landscape in 2012 growth has slowed , 19% , the proportion of the value of the entire application is 22% , compared to 2011 decreased ; LED display growth has slowed, the output value in the application of accounting to 13% . With the further decline in prices, has been the first to feel the downstream application vendors Spring plumbing .

LED Industry Ushered in A Watershed

Steady decline and enhance the quality of LED products prices, making the gradual recovery of demand , thus the industry , the downstream company collective benefit. Tongfang deputy Lianghai once in June for the Southern Reporter quite pleased to say that due to the abundant orders , machines are running at full capacity . That time, the number of LED CEOs of listed companies to disclose such phenomena are not uncommon .

Has become a trend to improve industry concentration

Secretary-General of Guangdong Provincial Association of Lighting Liu seems to LED for small companies, the government can not get the big one , the fierce competition in quality and price is no advantage, multi- channel construction on the threshold of reasons to enhance competitiveness as a result of the lack of face may not does not exit the grim situation.

Government orders , for example, the Government will set a general requirement , small businesses and government naturally large orders doubted see tears in their eyes . The fierce competition in the industry , some SMEs rely on low-quality , cheap win, but once a batch problem will be affected poor. " Zhongshan Hung Kee before we sell 10 dollars when he sold only three , a light meager profits , then pressing some suppliers of funds . " A LED industry sources . In terms of sales channels, due to the rapid growth of e-commerce channels , many agents and distributors rely on past traditions down to level grade distribution in a way no longer work as before . The electricity supplier for warehousing, logistics, Internet operators have certain requirements, it is difficult to keep up with the small and medium companies . In the long run , between the downstream enterprises to accelerate the merger integration is conducive to the entire LED industry matured further , let the market return and orderly competition .


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