The LED industry is expected to usher in a "blowout period" in the off-season
The revenue of LED companies has always been an indicator of the prosperity of the LED industry. Although December is the off-season in the traditional sense, the chip revenue in the LED industry chain increased by 59% year-on-year in December, and the overall packaging revenue was 53%. The revenue of major mainstream companies such as Everlight, Lextar, and Epistar has shown an even more gratifying trend.
The LED industry remains unabated during the off-season. How to fight the terminal “brand war”?
Among the major packaging manufacturers, Everlight’s revenue in December was NT$2.26 billion, a year-on-year increase of 70%. Benefiting from orders for lighting and backlights, the company expects shipments to continue to grow in the first quarter of this year. Lextar Electronics benefited from the rebound in orders for notebook computers and the increase in demand for flashes and TV backlights from Korean mobile phone manufacturers. Revenue in December was NT$1.097 billion, a month-on-month decrease of 5.84% from November, and a year-on-year growth rate of 55%. Among the major chip manufacturers, Epistar’s revenue in December reached NT$2.047 billion, a slight decrease of 1.36% from the previous month and a year-on-year growth of 78.8%.
LED lighting products have outstanding characteristics. Judging from the recent technological development trend, the light source efficiency can already reach more than 200lm/w. At the same time, the selling price of terminal lighting products in the market has continued to decline. Products from companies such as Osram and Cree have dropped to around US$10, while the price of energy-saving lamps of the same brand is about US$5. Considering the huge difference in service life, the actual cost of LED lamps is cheaper than ordinary energy-saving lamps.
Industry standards urgently need to be promulgated
2014 is a crucial year for the development of LED in China. With the continuous advancement of technology, the brightness of LED light sources continues to increase, the production cost of LED lamps continues to decrease, and the price of lamps has fallen into a range acceptable to consumers, and the LED lighting market will explode in an all-round way. This can also be seen from the actions of traditional lighting giants. In 2013, domestic and international giants, and even companies that had never done LED before, also joined the industry. "Everyone is doing it and wants to do it, which shows that the industry has matured, the products have matured, and LED lighting is about to explode." Deng Zichang said.
Regarding the chaotic situation of industry competition, Deng Zichang believes that there are two things that require the attention of all parties involved. One is to formulate industry standards, and the other is to establish industry alliances.
Deng Zichang said that the problem of lack of LED industry standards has been around for a long time. It is necessary to refer to the traditional lighting industry and international lighting industry standards to formulate LED lighting standards suitable for the Chinese market. "Of course, enterprises can also formulate their own corporate standards before industry standards are promulgated, and participate in the drafting and formulation of national standards as much as possible."
In addition, Deng Zichang said that although there are industrial alliances, channel alliances, and price alliances in some industries, in certain periods, these alliances play a positive role in promoting industry development and maintaining market order to a certain extent. Faced with the vicious price competition in the LED industry, Deng Zichang said, "As long as the timing is right and it is beneficial to the company's development, we do not rule out launching or participating in some alliances." In the packaging industry with a huge enterprise base, the market structure is not clear.
The LED industry is picking up this year, especially the explosion of demand in the downstream application market, which may give midstream packaging and upstream epitaxial chip companies that were plagued by overcapacity last year a short respite.
At the same time, the rapid development of downstream LED lighting has put forward more requirements for long- and mid-stream epitaxial chips and packaging, with excellent performance, higher luminous efficiency, and lower costs. All of this is testing the R&D and large-scale manufacturing capabilities of upstream and midstream companies.
Future market competition will focus on the field of LED terminal lighting applications, but what is more important is to form a response and cooperation between the upper, middle and lower reaches of the industrial chain, so that cost-effective products from the upper and middle reaches can be quickly pushed to LED lighting companies and accepted by end market consumers.
Future market competition will focus on the field of LED terminal lighting applications, but what is more important is to form a response and cooperation between the upper, middle and lower reaches of the industrial chain, so that cost-effective products from the upper and middle reaches can be quickly pushed to LED lighting companies and accepted by end market consumers.
For midstream packaging companies, this is a rare opportunity and the beginning of the gradual formation of the market structure.
Most packaging companies are seeking other methods due to the increasingly thin profit margins of single packaging business. Strengthening integration and extending the industrial chain has become a contingency strategy for most companies.
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