It’s not too late for LED lighting to bloom. It will really start in 2014 and enter a high-speed upward cycle lasting 2-3 years. According to a recent report by Bank of China International Securities, the start of demand was mainly driven by falling product prices. The profitability of chip manufacturers will be better maintained in 2014. The growth of downstream light source and lamp manufacturers mainly comes from the increase in demand. The midstream packaging has changed significantly. The main factors leading to this change are technological changes and upstream and downstream squeeze.
The integration of the LED industry, especially the upstream and midstream, will further accelerate, and the downstream light source and lamps market may present a diversified pattern. Channel and model changes have become new elements in the growth of the LED lighting industry. Whether it is e-commerce or other models, they may become a way for terminal manufacturers to break the traditional solidified lighting channels.
The LED lighting industry will begin a new rapid growth cycle in 2014. The main factor driving the growth of lighting is falling prices. The bulb prices observed by LEDinside show that the price of terminal lighting bulbs has dropped by more than 20% in the past 12 months. According to channel research, 3.5W-5W bulbs are very close to more than ten W energy-saving lamps in the Chinese market. LEDinside predicts that the output value of LED lighting will reach US$17.8 billion in 2014, and the overall number of LED lighting products shipped will reach 1.32 billion units, a year-on-year increase of 68%.
The chip integration process will continue, and the supply and demand situation is good for the profitability of chip manufacturers. 2014-2015 may be the last good time for chip manufacturers to grow. The brutal competition in the past few years has greatly reduced the number of chip manufacturers in mainland China. In terms of scale, Sanan Optoelectronics, Dehao Runda, Huacan Optoelectronics, and Tongfang Semiconductor have firmly established themselves in the first echelon. Due to factors such as capital investment capacity and technical level, the integration of chip manufacturers will further accelerate, forming a pyramid structure. In 2014, the supply and demand structure of chips is more likely to be tight, which is generally beneficial to the profit margins of chip manufacturers.
The structures of light source and lamp manufacturers will show diversified characteristics. The price decline of our terminal products will continue. On the one hand, light source and lamp manufacturers will pass on cost pressure to packaging manufacturers; on the other hand, they will further improve product solution design to absorb the profit margin pressure brought by price decline to a certain extent.
Packaging manufacturers have large variables. Affected by falling product prices and a short industrial chain, packaging manufacturers' profit margins are vulnerable to squeeze from upstream and downstream companies. Finding extensions to the industrial chain and new growth breakthroughs has become a top priority for packaging manufacturers from 2014 to 2015. Extensional expansion such as mergers and acquisitions and integration will also become frequent in this field.
The attributes of high-end electronic manufacturing in the LED industry are getting stronger. The electronic manufacturing attributes of the LED lighting industry are getting stronger and stronger. On the one hand, technological progress is driving the cost of chips to downstream terminal industries to continue to decline; on the other hand, as market demand amplifies, the effectiveness of capital investment, cost control capabilities, and management capabilities play an increasingly important role in market competition.
In addition to competing with traditional lighting manufacturers in terms of channels, traditional semiconductor manufacturers must also pay more and more attention to the cost advantages and process control advantages of traditional lighting manufacturers in manufacturing.
Capital expenditure capabilities support the long-term growth of listed companies. As an electronic manufacturing industry, the LED lighting industry’s capital strength is an important guarantee for expansion. Listed companies have greater advantages in financing and capital expenditures.
ANNA