In the case of lower and lower profits in traditional industries, many companies choose to transform into emerging industries. In addition to the most popular photovoltaic industry, many companies have chosen to enter the LED industry. Since last year, there has been a phenomenon of hot investment in LEDs. The market competition is fierce, which has led to the emergence of many companies with no profit on orders. As a result, some enterprises in Wenzhou are closed, and the LED industry is experiencing a new round of reshuffle.
LED overcapacity
In recent years, many traditional enterprises in Wenzhou have entered the LED industry with “hands-on†and hope to catch up with this “fast trainâ€. However, when the company squeezed its head into the industry, it found that there was overcapacity in the LED industry.
The production of LED lamps can be easily divided into three steps. The first step is chip manufacturing. This technology is firmly in the hands of a few companies. In Wenzhou, a small number of companies with mastery of technology are just doing the second step - packaging, that is, processing chips into light sources, and more companies are sourcing LED light sources, equipped with light fixtures and power supplies, assembled into complete lamps This is also known as the third step, and there is almost no technical content.
Like other emerging industries, overcapacity in the LED industry is mainly reflected in the excess of downstream low-end products, while the upstream high value-added products are insufficient. Affected by the international economic downturn, in recent years, some enterprises in Wenzhou Yueqing that have exported holiday lights have launched LED lights. Generally speaking, these enterprises mainly purchase LED light sources directly, and then assemble and produce them. In fact, almost all companies are able to produce LED holiday lights, the products have no features, and only the processing fee is earned after export. This production mode has not brought higher profits to the industry.
Industry insiders told reporters that packaging still needs a certain amount of technical content, such as solving heat dissipation problems and delaying the life of LED lights. I thought that mastering technology can easily win the market, but unexpectedly, due to vicious competition, many inferior LED lamps flooded the market and lowered the reasonable profit margin, which made the company unprepared.
The weight of profit reduction
The fierce competition in the market has made the "price war" an important means of competition for enterprises. The reporter learned that since 2012, the price of LED lamps has continued to fluctuate, with a drop of more than 1/3. According to the price trend of various brands collected by network terminals, the average unit power cost of LED lights has dropped from 12.08 yuan/watt to 6.93 yuan/watt in the past six months, a drop of 43%.
This terrible data makes the company feel "cold". A business owner engaged in LED assembly in Wenzhou told reporters that the decline in prices has made the company profit-free, and now the enterprises are in a state of hard support. In fact, Wenzhou has already seen the collapse of a number of LED assembly companies, which are still in production in the first half of the year. There are still many companies that have moved out.
The reporter learned from the Wenzhou Economic and Information Technology Committee that Wenzhou LED professional manufacturers only have more than 10, with an annual output value of about 400 million yuan. There are more than 100 luminaire companies that can get involved in LED assembly. These companies have low technical content, and LED products generally have problems such as severe light fading.
In fact, the sales of Wenzhou LEDs are relatively simple, basically relying on engineering lighting, such as LED street lights, a large part of which relies on government procurement. According to industry insiders, the competition in the civilian market is more intense. Some enterprises in Wenzhou lack their own brands. In addition, the prices of some foreign brands have taken the initiative to cut prices, which has lowered the price gap with domestic brands, making it difficult for this market to enter. In order to adapt to market demand and reduce production costs, enterprises can hardly guarantee the quality of products. The life of some LED bulbs has been shortened (originally 20,000 hours, now less than 15,000 hours). In such an environment, many companies are facing bankruptcy if engineering orders are not available.
The relevant person in charge of the Wenzhou Economic and Trade Commission also suggested that in addition to guiding local procurement of street lamps, the government is also considering giving appropriate subsidies to new energy production enterprises to support the sustainable development of enterprises, especially start-up enterprises.
Large space for future development
Not only in Wenzhou, the national LED industry has suffered from reshuffle, most LED companies lack technology, and core parts such as chips are highly dependent on imports. Enterprises do not have research and development strength, rely on plagiarism, and fight price wars, making the market that is not standardized more chaotic.
In the face of market chaos, then, is there any prospect for the LED industry?
In several lighting markets in Wenzhou, LED lamps have already occupied half of the country. Mingxin LED lighting business said Zhang Ru. "For the popularity of LEDs, Wenzhou is at the forefront of the province. But because of the rapid development of LEDs in previous years, it is now necessary to slow down to digest."
Zhang Ru introduced that she has been in business for seven or eight years, initially as a wholesale lighting, and has now established an LED company. Now, as long as the lamps can be used in the project, they will be changed to LEDs. Many citizens are more willing to choose LED lamps.
In China, incandescent lamps have stopped production. At present, the main light sources are energy-saving lamps and LED lamps. Although the price of LED lamps is nearly double that of ordinary energy-saving lamps, LED lamps save more than 50% energy than energy-saving lamps. For the future development, Wu Zutong expressed his confidence that despite the various difficulties, the future lighting market will eventually be LED-based.
In addition, Wenzhou enterprises have made breakthroughs in the field of LED technology. The LED flashlight developed by Zhejiang Shengbo Electronics Co., Ltd. solves the problem of heat dissipation well, and does not require battery flashlights to generate electricity by itself. These technologies are ahead of the international level, and the company's sales are growing steadily.
He Zaihua, a senior researcher at China Investment Consulting, believes that the LED industry needs to get out of the predicament. From the perspective of enterprises themselves, on the one hand, they must actively expand the domestic market, on the other hand, they must strengthen the research and development of core technologies while strengthening mergers and acquisitions in the low-end and mid-end sectors.
( This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED . Readers need to verify the relevant content by themselves. )
LED overcapacity
In recent years, many traditional enterprises in Wenzhou have entered the LED industry with “hands-on†and hope to catch up with this “fast trainâ€. However, when the company squeezed its head into the industry, it found that there was overcapacity in the LED industry.
The production of LED lamps can be easily divided into three steps. The first step is chip manufacturing. This technology is firmly in the hands of a few companies. In Wenzhou, a small number of companies with mastery of technology are just doing the second step - packaging, that is, processing chips into light sources, and more companies are sourcing LED light sources, equipped with light fixtures and power supplies, assembled into complete lamps This is also known as the third step, and there is almost no technical content.
Like other emerging industries, overcapacity in the LED industry is mainly reflected in the excess of downstream low-end products, while the upstream high value-added products are insufficient. Affected by the international economic downturn, in recent years, some enterprises in Wenzhou Yueqing that have exported holiday lights have launched LED lights. Generally speaking, these enterprises mainly purchase LED light sources directly, and then assemble and produce them. In fact, almost all companies are able to produce LED holiday lights, the products have no features, and only the processing fee is earned after export. This production mode has not brought higher profits to the industry.
Industry insiders told reporters that packaging still needs a certain amount of technical content, such as solving heat dissipation problems and delaying the life of LED lights. I thought that mastering technology can easily win the market, but unexpectedly, due to vicious competition, many inferior LED lamps flooded the market and lowered the reasonable profit margin, which made the company unprepared.
The weight of profit reduction
The fierce competition in the market has made the "price war" an important means of competition for enterprises. The reporter learned that since 2012, the price of LED lamps has continued to fluctuate, with a drop of more than 1/3. According to the price trend of various brands collected by network terminals, the average unit power cost of LED lights has dropped from 12.08 yuan/watt to 6.93 yuan/watt in the past six months, a drop of 43%.
This terrible data makes the company feel "cold". A business owner engaged in LED assembly in Wenzhou told reporters that the decline in prices has made the company profit-free, and now the enterprises are in a state of hard support. In fact, Wenzhou has already seen the collapse of a number of LED assembly companies, which are still in production in the first half of the year. There are still many companies that have moved out.
The reporter learned from the Wenzhou Economic and Information Technology Committee that Wenzhou LED professional manufacturers only have more than 10, with an annual output value of about 400 million yuan. There are more than 100 luminaire companies that can get involved in LED assembly. These companies have low technical content, and LED products generally have problems such as severe light fading.
In fact, the sales of Wenzhou LEDs are relatively simple, basically relying on engineering lighting, such as LED street lights, a large part of which relies on government procurement. According to industry insiders, the competition in the civilian market is more intense. Some enterprises in Wenzhou lack their own brands. In addition, the prices of some foreign brands have taken the initiative to cut prices, which has lowered the price gap with domestic brands, making it difficult for this market to enter. In order to adapt to market demand and reduce production costs, enterprises can hardly guarantee the quality of products. The life of some LED bulbs has been shortened (originally 20,000 hours, now less than 15,000 hours). In such an environment, many companies are facing bankruptcy if engineering orders are not available.
The relevant person in charge of the Wenzhou Economic and Trade Commission also suggested that in addition to guiding local procurement of street lamps, the government is also considering giving appropriate subsidies to new energy production enterprises to support the sustainable development of enterprises, especially start-up enterprises.
Large space for future development
Not only in Wenzhou, the national LED industry has suffered from reshuffle, most LED companies lack technology, and core parts such as chips are highly dependent on imports. Enterprises do not have research and development strength, rely on plagiarism, and fight price wars, making the market that is not standardized more chaotic.
In the face of market chaos, then, is there any prospect for the LED industry?
In several lighting markets in Wenzhou, LED lamps have already occupied half of the country. Mingxin LED lighting business said Zhang Ru. "For the popularity of LEDs, Wenzhou is at the forefront of the province. But because of the rapid development of LEDs in previous years, it is now necessary to slow down to digest."
Zhang Ru introduced that she has been in business for seven or eight years, initially as a wholesale lighting, and has now established an LED company. Now, as long as the lamps can be used in the project, they will be changed to LEDs. Many citizens are more willing to choose LED lamps.
In China, incandescent lamps have stopped production. At present, the main light sources are energy-saving lamps and LED lamps. Although the price of LED lamps is nearly double that of ordinary energy-saving lamps, LED lamps save more than 50% energy than energy-saving lamps. For the future development, Wu Zutong expressed his confidence that despite the various difficulties, the future lighting market will eventually be LED-based.
In addition, Wenzhou enterprises have made breakthroughs in the field of LED technology. The LED flashlight developed by Zhejiang Shengbo Electronics Co., Ltd. solves the problem of heat dissipation well, and does not require battery flashlights to generate electricity by itself. These technologies are ahead of the international level, and the company's sales are growing steadily.
He Zaihua, a senior researcher at China Investment Consulting, believes that the LED industry needs to get out of the predicament. From the perspective of enterprises themselves, on the one hand, they must actively expand the domestic market, on the other hand, they must strengthen the research and development of core technologies while strengthening mergers and acquisitions in the low-end and mid-end sectors.
( This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED . Readers need to verify the relevant content by themselves. )
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