Domestic LED industry map: foreign whales swallow 70% profit
"Mastering the core technology and manufacturing of epitaxial wafers and chips, accounting for 70% of the entire chain." On August 26, Tang Guoqing, director of the Semiconductor Lighting Professional Committee of China Lighting Association, outlined the profit of the LED industry. Atlas, "Even in the remaining 30% of profits, 20% are taken by chip packaging companies, leaving only 10% for the terminal application." Terminal applications are the areas where most domestic LED companies gather. According to statistics from LEDinside, an LED industry research institute, as of the end of 2009, there were more than 1,300 companies engaged in LED middle and lower reaches in the Pearl River Delta region, including more than 900 in Shenzhen. More than 90% of local LED companies must fight each other in this 10% profit, and the market dilemma can be imagined (for details, please refer to the report “Report on Loss of 90% LED Street Lights†on July 19, 2010). Another identity of Tang Guoqing is the general manager of Cree China. Cree, which is also known as the world's four largest LED chip giants, with Nichia, Osram, Philips, etc., is one of the vested interests of this "70% profit". Cree's just-announced annual report for the year ended June 30, 2010 showed that its fiscal year 2010 revenue reached $850 million, a 53% increase over the same period last year; net profit increased by 402% to $152.3 million. Foreign LED Chinese Feast "China's LED lighting market is an important factor in the growth of Cree's revenue." On August 26, Christopher M. James, vice president of global strategy and business development business of Cree, stressed to reporters that Cree has plans to shift the focus of LED industry to China. The majority of the company's approximately $167 million investment plan for 2010 will be used in China. Just last November, Cree invested 2 billion yuan in Huizhou, Guangdong Province to establish a chip production base. The production line is expected to start mass production in December this year, and the daily production capacity will reach 1.5 million. Christopher M. James believes that the reasons for the rapid growth of Cree's sales in China and the excess profits can be attributed to the following factors: First, Cree has a complete LED industry chain layout, covering materials, epitaxial wafers, chips and packaging. And the entire industrial process of lighting solutions; the second is that Cree continues to increase investment in China, while also close to the market and customers, but also has a tax advantage. China Customs currently imposes a 20% import tariff on each LED chip. According to Cree's financial report, in fiscal 2010, Asian market revenue accounted for about 2/3 of its total revenue, and its revenue growth in mainland China and Hong Kong reached 100%. Tang Guoqing pointed out that even in the upstream core epitaxial wafer and chip manufacturing fields, not all companies can enjoy high profit margins. At present, the core technology of global LED patents is mainly in the hands of the four giants mentioned above. The technological monopoly advantage enables these core enterprises to obtain excess profits. Looking at mainland China, there are only 62 companies with LED chip production capacity. Even if there are enterprises with large-scale packaging capabilities, there are only a few hundred in the upstream of the layout industry chain. "90% of LED companies are a bit exaggerated. Recently, several representative LED companies in the domestic capital market have reported good profit margins." Tang Guoqing believes that the current loss of domestic LED companies still needs to be laid out from the industrial chain. Find ways to find problems with corporate strategic planning. For enterprises with domestic layout in the upstream of LED, Tang Guoqing pointed out that, for example, Sanan Optoelectronics [48.60 -0.29%] (600703.SH) made low profits for red and yellow products, adjusted for blue-green light and profit margin of automobile front-light products. It is obviously improved. For example, Shilanwei, Wuhan Huacan, previously only chip production line, epitaxial film needs to be outsourced, reducing product profit margin. Both companies have raised financing at the beginning of the year, and they have the advantage of manufacturing the industrial chain of epitaxial wafers and chips, and the profit margin is naturally good. "For domestic chip packaging companies, it should be said that 90% of the money is made, but the production yield determines the difference in profit margins." Tang Guoqing said that the concept of 90% corporate losses should be concentrated in the LED industry. The application market at the end of the chain. 150 billion yuan market “Whether it is the first application of ambient light lighting, or the rapidly growing display lights such as automotive lighting and LED TV, China has undoubtedly become the world's largest LED lighting application market.†Zhang Xiaofei, director of the LED Industry Research Center, said that in the LED full color screen, In terms of the output of LED traffic lights, solar LED lights and LED landscape lighting, China is now the world's number one. It is estimated that by 2010 China's LED sales value will exceed 150 billion yuan, this figure is twice as high as in 2008, and is growing at a rate of 30% per year. “The 2010 Shanghai World Expo is becoming the world's largest LED show. The Expo Park is also becoming the world's largest LED demonstration zone.†On the evening of August 25th, the Shanghai World Expo Park invited the park's night lighting master planner and chief designer. Professor Hao Luxi from the School of Architecture of Tongji University led the news media to the Expo. Hao Luoxi said that at present, 1.05 billion LED chips are used in the Expo site. About 80% of the indoor lighting sources in the Expo venues use LED green light sources, which is about 90% lower than ordinary incandescent lamps. The concentrated demonstration shows how widely LEDs are used in future urban construction and how huge the market potential is. “In terms of industry scale and market application, China is undoubtedly already a big LED country.†Christopher M. James, while admiring the huge market in China, also pointed out that Chinese LED companies still have a 3-5 year gap in technology with top European and American companies. This also directly leads to the fact that it is still difficult for domestic enterprises to obtain excessive profits on high-end projects such as the Olympics and the World Expo. Christopher M. James said that outdoor landscape lighting has high requirements for upstream investment, technology, talents and patents. It is not a simple pre-production to fight for a low-priced project and build a fashion. The technology is not up to standard and the quality is not enough. The later maintenance service is a big trouble, which is why many domestic lighting companies lose money in this market. "As far as China's LED industry is concerned, there are not many companies that are willing to invest in technology and management talents in the face of policy, market, capital and other temptations." Gu Wenjun, senior analyst of semiconductor industry in iSuppli pointed out that one or two companies If you don't invest in research and development, you can say that it is forced by survival. If the entire industry lacks technical talent reserves, it will be very sad. He believes that China's LED light source is late and the technology is not mature, so many LED lighting companies have to import foreign light sources in order to maintain their "quality", which will inevitably form a technical dependence, "it will not take the 70% of the people who take it away." Profit." Subsidy model "Under the national low-carbon policy, government financial subsidies, and the performance of the development zone, domestic LEDs have not taken the lead, and large-scale outdoor lighting of street lights and landscape lights, in fact, this direction is wrong." Tang Guoqing believes that any enterprise Development is to follow the rules of the market. Domestic LED companies start late, have less accumulation, and have limited investment. At present, products are mainly concentrated in the low- and medium-end areas of low-power, while street lighting is a high-power field and involves natural environment and current waves. In many aspects, such as surge, stability attenuation, etc., domestic enterprises at this stage rarely have the ability to fully meet. Christopher M. James also agreed that he believes that Chinese companies should give priority to indoor lighting such as commercial and hotel with relatively low technical and fitness requirements and certain market demand. "Selecting a good chip and getting a good light will have a way out. Based on the low price, it will be a quick success for the market." Tang Guoqing said, "The price is not the way out, but it is cheaper and lower than the fluorescent light. The price of selling LED is not good, the product is natural. No one wants." Tang Guoqing also agreed that domestic enterprises should turn their attention to the commercial lighting market, because the technical difficulty of outdoor lighting, indoor lighting and other industries is relatively low compared to street lighting landscapes, and the requirements for performance and stability are relatively mature, such as in shopping malls, hotels, and In some applications such as small indoor landscape lighting, the existing technology and talents of domestic enterprises are sufficient to provide cost-effective products for such markets. “The promotion of LED in the field of lighting needs to be gradual, especially in the lighting field that matches the current LED technology.†Ren Yuanhui, honorary director of the Interior Lighting Committee of the China Lighting Society, said that the technology of LED promotion in road lighting is not yet complete. Mature, so you can try to promote it on some roads and community roads. Don't start from the beginning. In addition, Tang Guoqing pointed out that in the government's industrial support policy, the specific implementation rules of Japan and other countries can be used to give the enterprises that use LED commercial licenses a cash subsidy after the conversion of carbon credits, so that economic leverage can be used to promote business in the market environment. Enterprises first apply LED lighting on a large scale to promote domestic LED lighting companies to obtain reasonable profits and continue to increase investment in independent technology production. Automotive wire is a type of wire used in the construction of vehicles. It is designed to meet the specific needs of the automotive industry, including resistance to high temperatures, vibration, and abrasion. Automotive wire is used in a variety of applications, such as wiring harnesses, electrical systems, and battery cables. 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