However, in recent years, the competition in the LED industry has become increasingly fierce and smoke-filled, and it has entered the Warring States Period where heroes compete for the throne. However, Nationstar Optoelectronics is not affected by the outside world at all. It always adheres to the "mid-to-high-end" brand positioning, the "innovative" development concept and the "steady" development pace, and has embarked on a development path with "Nationstar characteristics".
According to statistics, the output value of the global LED packaging industry declined by about 3% in 2015. This is a rapid development that has continued for many years. The industry is experiencing recession for the first time. However, even in this year, Nationstar Optoelectronics still achieved a growth of 19.15%, and was one of the few packaging manufacturers that was able to thrive in a bleak year like 2015.
How did Nationstar Optoelectronics manage to rise instead of falling despite the industry's decline? With this question, the reporter was honored to interview Dr. Li Cheng, deputy general manager of Nationstar Optoelectronics during the Guangya Exhibition.
Dr. Li gave a wonderful explanation on Nationstar Optoelectronics’ strategies to defend against enemies in the LED packaging industry during the Warring States Period.
Trend is king: ride the fast train of small-pitch displays
One of Nationstar's strategies is to invest heavily in display LED packaging. Nationstar is one of the earliest packaging manufacturers in China to start the development of small-pitch LEDs. Up to now, Nationstar has mass-produced LEDs in 2121, 1515, and 1010 packages, 0808 is in mass production, and the smaller 0606 package is also under development. One generation of mass production, one generation of research and development, and one generation of reserve. Nationstar Optoelectronics uses innovative concepts to continuously practice its internal skills and strategize in the field of packaging.
Dr. Li is optimistic about the future of small-pitch displays. One of the main reasons is that the urbanization of emerging countries around the world, including China’s urbanization process, is still accelerating. In the future, the population will With further agglomeration in big cities, the display demand for large indoor event spaces will continue to grow.
On the other hand, the advent of the era of smart internet or, in the future, the era of the Internet of Things, will create a lot of display needs for large screens and outdoor spaces, such as various transportation and logistics information, outdoor display of visual data in smart cities, etc. LED displays still have incomparable advantages over LCDs, so there is still considerable room for growth in the future. Even current hot spots such as VR will be one of the market areas that small-pitch LEDs strive for.
In fact, the main growth of Nationstar Optoelectronics' turnover in 2015 came from the LED part for display screens. Up to now, the production capacity of small-pitch display LEDs has reached 600KK/month, and the recently announced expansion plan will invest 240 million, mainly in small-pitch LEDs.
The effect of small spacing on LED demand is very obvious, because under the same area, the pixel spacing of the display screen and the demand for lamp beads show an exponential growth relationship. For example, the number of LEDs required for a P2 pitch display is 250,000 LEDs per square meter. If it is P1, the number of LEDs required is one million, while the previous generation P4 requires only 62,500 LEDs.
Therefore, even after the localization of small-pitch display LEDs, prices dropped significantly amid fierce competition from manufacturers such as Jingtai, Cinda, and Blue Arrow. The number of small-pitch display LEDs from Nationstar Optoelectronics still increased significantly. In addition, for example, the outdoor 3535, Nationstar has been highly praised in the market because of its earlier research and development and promotion, and after years of customer verification, Nationstar has benefited from this, and its operating income has also grown rapidly.
Furthermore, in this field, Nationstar Optoelectronics has quite a wealth of patent reserves, so it will not worry about being subject to patent restrictions like domestic white LEDs. Instead, it has the strength to choose to attack decisively when it is subject to intentional infringement or provocation.
Co-vertical: Upstream and downstream layout to deal with the risks of technological changes
If horizontal mergers and acquisitions such as Hongli's acquisition of Smede are compared to vertical mergers and acquisitions, then the main strategy adopted by Nationstar in the past was joint vertical mergers and acquisitions. Inter-industry mergers and acquisitions can achieve good economies of scale, but vertical integration enhances the company's ability to resist risks to a certain extent.
One of the important risks in the LED industry is the risk of technological changes, especially for packaging companies. New technologies like CSP have an increasingly severe impact on the packaging industry. As a packaging factory, Nationstar Optoelectronics is also actively preparing for this and attaches great importance to it.
For this reason, Dr. Li said that Nationstar has carried out a large number of vertical layouts and corresponding technical reserves in the past few years, so that even if packaging is not really needed in the future, Nationstar will not worry. Upstream, Nationstar already has chip manufacturers Nationstar Semiconductor and Avila, while downstream Nationstar has also established an initial large-scale lighting channel. In addition, the parent company plans to cooperate with Foshan Lighting in the future. With the potential for strong integration, Nationstar Optoelectronics is fully prepared to deal with possible technological changes.
For now, Nationstar Semiconductor's chip production capacity is already in short supply. Yavilang focuses on new applications, especially the research and development and production of chips in special wavebands such as ultraviolet light and plant lighting.
In the field of LED white light, Nationstar Optoelectronics is also in a leading position in the country in terms of product quality, reputation, and technology leadership. The concept of the 2835 platform is deeply rooted in the hearts of the people. At the same time, new products such as backlight series, COB, EMC, CSP, as well as car headlights, flashlights and other fields are vigorously promoted. At the same time, it is in a leading position in emerging fields such as ultraviolet deep ultraviolet, high-power infrared, and plant lighting.
As for the downstream layout, Nationstar has also been expanding its channels for a long time. At present, Guoxing Lighting has a presence in 17 provinces across the country. Level offices and more than 1,000 dealers, but unlike Fo Zhao, Guoxing focuses on high-end commercial lighting products and markets.
Dr. Li said that in recent years, with the rise in consumption levels in the Chinese market, especially in first-tier cities, consumers no longer blindly pursue cheap products, but have increased their demand for quality of life and consumption experience. This is an era of transition from functional consumption to experiential consumption.
Therefore, Nationstar will continue to maintain its lighting product line. In the future, it will focus on product design and brand promotion, and provide high-end products that meet the needs of consumer upgrades. Just like the changes in catering, people used to pursue a full meal, but now people care about the details of the experience. For example, new food brands such as Haidilao, through the design of cultural concepts and more humanized services, although they still eat the same things, people will have a better consumption experience and do not care too much about the price.
Conclusion: Manufacturing upgrades of Chinese packaging plants
"Although the domestic market is full of brutal price competition, in the high-end market, customers still care more about stability, reliability and light quality. Therefore, these customers recognize some international brands more. In fact, in terms of cost performance, Nationstar has already surpassed them, and its quality is not inferior to international brands. ”
Dr. Li said, “The main problem is that Chinese companies need to upgrade their brands, and by extension, the transformation and upgrading of the manufacturing industry. In the past, what we pursued was to make something from scratch, to make something that didn’t exist first, and to do it cheaper than others. Now we should abandon this kind of thinking and instead pursue better quality, higher reliability, and better consumer experience. We should not give people the impression that domestically produced products are shoddy. As the leader of China’s packaging industry, Nationstar Optoelectronics will not change its positioning. The blind pursuit of scale and expansion will continue in the direction of improving quality and enhancing the brand image of Chinese enterprises. ”
ANNA