LED lighting industry may be even worse in the second half of the export situation

If the goal of localization of the chip can be achieved, LED lighting is expected to significantly reduce prices, a huge Chinese civilian market will accelerate the economic downturn in Europe and the United States, export orders fell sharply, making China's LED lighting industry dominated by overseas markets fell to a trough. However, the promulgation of favorable policies in May gave a shot of doping to the troubled LED green lighting industry. This level of excitement can be seen from the Guangzhou International Lighting Fair as a barometer of the global lighting industry.

According to public information, as the largest lighting exhibition in the world, the "Guangzhou International Lighting Exhibition" is hosted by Guangya Messe Frankfurt Co., Ltd. and has a history of 17 years. The reporter learned from the organizers that the exhibiting area of ​​the 17th exhibition to be opened on June 9th is 10% higher than last year, reaching a record high of 220,000 square meters.

However, related experts said in an interview with reporters that LED green lighting industry is currently undergoing reshuffle, the industry to restore vitality to the domestic civil market has yet to fully open, and the market is open to the premise that the chip to achieve localization, LED lighting is expected to significantly reduce prices.

Export situation

May be worse in the second half

As an emerging industry, China's LED lighting industry and the photovoltaic industry have a common fatal weakness - three outside: the core raw materials in overseas, technology comes from overseas, the market is concentrated in overseas, China's LED lighting industry is mainly concentrated in the downstream packaging.

According to the data, 80% of domestic LED companies' products are mainly export-oriented. Under the influence of the European economic crisis and the inability of the US economy to recover, orders for LED lighting companies have been declining since the second half of last year. Earlier, the reporter learned from the interview at the 111th Canton Fair held on May 20th that it has been very common that the domestic LED companies' orders from Europe and the United States have fallen by 30% since the beginning of the year.

“This year, the market situation in Europe and the United States is particularly grim, and orders have been reduced by 40%.” Cai Yahui, chairman of a company in Shenzhen City, which makes LED lamps, told reporters. Another Dongguan-based company also told reporters that orders from Europe have decreased by more than 50%. Reporter learned from a number of LED companies, Europe and the United States orders fell by 3 to 50% in the industry is quite common.

Reduced orders directly led to a decline in many businesses. According to the statistics of the Guangya Lighting Research Institute, from 2011 to the first quarter of this year, the 2011 annual results report issued by 12 companies listed on the market showed that only SINOPHOTO and JEC have maintained a slight increase in growth rate. The growth rate of the 10 companies has declined to varying degrees. Among them, long-term lighting with a growth rate of 234% in operating revenue in 2010 had a growth rate of only 57% in 2011, and Wanrun’s performance was even zero.

Pan Wenbo, the founder of Guangzhou International Lighting Exhibition and the director of the Guangya Lighting Research Institute, admitted in an interview that the export situation of Chinese LED lighting companies may be even worse in the second half of this year.

Industry reshuffle

8,000 corporate shuffling

In contrast to the industry downturn, the IPO enthusiasm of domestic LED companies is still rising this year. According to statistics, in the first quarter of this year alone, there are 8 LED companies that have been listed and have been waiting to be launched, which is more than the total number of LED companies listed in the company last year. Among them, there were 6 listed and met in March. At the end of last year, four LED companies had staged a "grand event" in the next five days.

On the surface, the IPO boom seems to run counter to industry conditions. However, Guangya Lighting Research Institute believes that the emergence of a listing boom is actually a preparation for the future; otherwise, it is very likely to be swallowed up by potential mergers and acquisitions. "The industry's temporary trough has provided a time for shuffling. International giants and domestic LED companies competing for listing have become the dominant players in the reshuffle," said Pan Wenbo.

It is estimated that there are currently about 8,000 LED companies in the country, which are in a state of “small and scattered”. The industry's call for rectifying the industry's development order through shuffling has always been high. In fact, the undercurrent of shuffling is also surging in the industry. Since last year, there have been incidents of LED companies closing down.

According to reports, as of the end of 2011, there were more than 80 LED lighting companies that closed down in Shenzhen, and Foshan, which is located in the Guangdong Province, was close to 10% of LED lighting companies in mid-2011. Immediately after Shenzhen and Foshan, LED lighting companies in Dongguan and Zhongshan also fell into the cold wave of closure.

The Guangzhou International Lighting Fair also showed signs of industry reshuffle. According to Pan Wenbo, the exhibiting area of ​​the 17th Guangzhou International Lighting Fair held in June this year has expanded by 10% from last year to reach a record high of 220,000 square meters, but the number of enterprises has decreased by 10% from last year, from 2,900 to 2,600. Home, shows that the degree of enterprise concentration has increased and the industry reshuffle is beginning.

Market penetration

The core technology is difficult to drop due to lack of price

In the face of this grim situation, the launch of the domestic market, especially the civil market, is regarded as the key to the sustainable development of the industry. However, at present, the LED civil market penetration rate is only about 5%.

At the seminar “Looking for the LED Industry in the Spring” held by Guangya Messe Frankfurt Co., Ltd. (hereinafter referred to as “the seminar”), experts from the Shanghai Lighting Institute stated that one of the factors that hinder the large-scale application of LED lighting products is price. Behind the high prices is the reality that chip core technology is monopolized by foreign companies.

A business person who took part in the seminar gave an example to reporters. The average retail price of a 5-watt LED light bulb that replaces a traditional 60-watt incandescent bulb was 18.9 US dollars (about 118.9 yuan), and the average life expectancy was about In 50000 hours, if the residential electricity price in first-tier cities is calculated at 0.61 yuan/watt, the use cost of using LED lights to maintain 50,000 hours of lighting is about 270 yuan. The 60-watt incandescent lamp is priced at about RMB 3, and the average life expectancy is only 1,500 hours. Calculated under the same conditions, the cost of the incandescent lamp is about RMB 1,932.

"Advantages of LED lights are obvious, but why is it not universal?" The source explained to reporters: On the one hand, consumers are not accepting prices. On the other hand, the lack of core technologies such as chips has led to domestic LED lighting. The difficulty in cost reduction is also the reason for the slow development of the LED lighting civil market.

According to the introduction of Pan Wenbo, the current price of LED chips accounts for nearly 60% of the cost of LED lighting. "The price reduction of the chip can drive down the cost of lamps by nearly 50%; the cost of lamps and lanterns can be reduced to 30%-40% now, and the price of LED bulbs that replace 40W incandescent lamps will fall to 20-30 yuan; in addition, the decline in street lamps will be slightly smaller. But it can also be reduced to the mainstream price of around a thousand dollars.” Pan Wenbo said.

It is worth noting that the Ministry of Science and Technology released the “12th Five-Year Plan” (Draft for Soliciting Opinions) for the development of semiconductor lighting technology on May 7th. By 2015, localization of large-scale MOCVD (LED epitaxial wafer production) equipment and key raw materials will be realized. The cost of LED products has been reduced to 1/5 of that in 2011. At the seminar, Chinese and foreign experts agreed that if the goal of localization of the chip can be achieved, LED lighting is expected to drastically reduce prices, and the huge Chinese civilian market will accelerate.