China's LED industry investment overheating occurs

In the shadow of the financial crisis of 2008 andemergence of the phenomenon everywhere.
2009, I believe that even ordinary people know,Chung Kwan said, LED display used to be a very
LED the most fire, then fire LED Why? What ledgood value industries, the market is still the
to this follow the trend of the domestic local?largest in China. However, the price of China's
  Over into the LED industry, is the fancy of thecurrent display is growing, the quality requirements
industry a huge market prospects and higherare getting lower and lower, the market situation
margins. Leading packaging and application ofis very confusing, and the price of foreign LED
domestic enterprises, the average gross margindisplay is of similar products of 5 to 10 times.
of 40% -50%, net profit margin of 20% -30%.Initially appear overheated investment
LED luminous efficiency as a breakthroughIndustry experts generally believe that the
product application scope has also been expanded.overheating investment in China has begun to
A cell phone screen to the 10 or so LED devices,appear. Some people think that, from the current
but a need for 42-inch LCD TV is 1000 LED, LED,domestic market and the number of LED industry
with its excellent performance, in addition to bepoint of view, has been duplication of investment.
applied in the lighting field, but also continuouslyLED industry in the state support alive, the new
improve the backlight in the TV area of infiltrationLED industry investment over the increasing
rate. 2010, the global LED backlight rapid growth isintensity of the situation, the enterprise value of
expected to occur, is expected to demand 30the technology or how to seize advantage of
billion TV, notebook needs 6 billion, the phonecore competence, need serious consideration.
needs 7 billion. "This figure, more than 2008According to reports, investment projects in this
applications in the LCD panel 8 billion increased 4year's LED, 52% invested in the application, 37%
times.invested in the chip industry. Source of the above
It is the prospect of seeing where the industry,investment, accounted for half of the Taiwanese
and the brightest of funds pour into the LED. 3capital. But Unfortunately, the mainland by huge
An optical device has been the core upstreamdowry, marry a third-rate technology and
MOCVD LED units from 18 to 22 sets, 20 sets ofTaiwan's second-hand equipment. He also said
new Tianjin item in turn; Hangzhou Silaninvestment in 2009, mainly concentrated in
Microelectronics also plans MOCVD 2010 increasedeastern China, the traditional LED industry base of
from 6 sets of 10 units, and to expand waferGuangdong's investment less, the future of China's
capacity doubled; BDO Runda are about 30 setsLED industry center may move northward.
of plans for the future purchase of MOCVD.It is expected ,2009-2010, LED chip scale
     LED applications without risk is the corepackaging business expansion, making 2008 the
raw materials, no testing platform, patent-free,surplus production capacity may be reproduced
high cost, no order of the market, no standards,Depression scenario. He also said that the Chinese
the final analysis, no technology, particularly18 provinces and cities have more than 100
non-core technology.crystalline silicon solar project as a "first in
From the upper reaches of the epitaxial wafercommand", with echoes, more than 100 cities to
and chip manufacture, the middle of the package,the local public lighting LED chips as a monopoly
and then to downstream applications, technicalinvestment . It goes on, the National LED industry
features and capital characteristics very different,standards, product standards can not really
gradually reduce the barriers to entry. Upperidentify and implement. Parts are stepping up
wafer with a typical "double high" (high-tech, highdevelopment of local small standard LED, LED
capital) characteristics of the upstream chip alsodomestic enterprises make an issue of domestic
has a high technical content, relativelydemand will be difficult. The effectiveness of the
capital-intensive features, encapsulated in thenational six policy and government investment
technical content of middle and upper to lowermay follow after the weak, making the market
capital investment, and application productsto support the continued prosperity of a problem.
technical content and the minimum capitalIndustrial concentration will increase
investment.Currently, there are LED epitaxy and chip
The typical Chinese LED industry chain structure isdomestic companies more than 60, LED packaging
not balanced. 2008 chip, package, and applicationcompany more than 1,000, LED application class
of output ratio of 1:9:22, industrial developmententerprises are close to 2,000. However, the real
malformation. Overall, China's LED business is veryimplementation of the downstream through the
large, but the output is very low, not a bigcompany little over 100 million yuan output value
business. In 2004, China LED of the output canof the company each year, only dozens. In
not match a Nichia. Although the past few yearsindustry expanded rapidly and foreign
the development of our LED is constantly gettingmanufacturers active layout background, need to
better, but overall the situation has notreshuffle the domestic industry.
fundamentally changed.The five major LED manufacturers, Lumileds and
Because no technology companies gathered in theCree have been satisfied with the monopoly of
Chinese LED industry chain downstream, thechip and wafer, but through a series of
homogenization of a serious problem. In the fierceacquisitions in the industry chain from upstream to
competition in the area of the downstreamdownstream and application development, and
industry chain, a number of companies playing thethrough a combination of patented products, and
"price war." Shenzhen Quantum Optoelectronicenhance brand . Concern is that companies such
Co., Ltd. General Manager Liu Zhen describes aas Philips and Cree, through equity participation, M
small part of the business opportunities for quick& traditional lighting companies, etc., and
results using the local governments everywhereactively develop the Chinese market, domestic
to install all kinds of LED products with qualityenterprises will face even greater pressure of
defects and make unfair price war, a direct resultcompetition.
of "bad money drives out good money"