LED industry competition stabilizes government subsidies or will tighten

Different from the high-tech threshold of the sensor industry, the technical threshold of the LED industry is relatively low, so more and more enterprises enter the industry, which eventually leads to the same overcapacity as the photovoltaic industry in the past, and the price war between enterprises. After a round of shuffling, many companies closed down. Different from the high-tech threshold of the sensor industry, the technical threshold of the LED industry is relatively low, so more and more enterprises enter the industry, which eventually leads to the same overcapacity as the photovoltaic industry in the past, and the price war between enterprises. After a round of shuffling, many companies closed down. Recently, the reporter learned that in the three years from 2012 to 2015, the price of LED chips has dropped to one-tenth of the original. As the second largest LED chip manufacturer in China, Huacan Optoelectronics experienced a painful decline in the last round of price declines, and the company's performance has shown a sharp decline. However, the current price of chips has remained at around 200 yuan, and competition among enterprises has also stabilized. It is worth mentioning that the government's subsidies to LED companies have made many companies enter the industry not for the purpose of developing LEDs, but for subsidies, which is one of the reasons for the overcapacity in the industry. Liu Can, president of Huacan Optoelectronics, said that as the industry competition stabilizes, several companies will eventually become the largest, and government-level subsidies will be tightened, which will subsidize those companies that can participate in international competition. Those companies that cannot receive subsidies will gradually withdraw from the stage in the next round of competition. Industry competition tends to be stable As a leading LED chip supplier in China, Huacan Optoelectronics has become the second largest LED epitaxial wafer manufacturer in China and one of the world's leading LED epitaxial wafer manufacturers. After 2000, the LED industry experienced rapid development. LED companies such as Huacan Optoelectronics and Sanan Optoelectronics also took the lead in the development of the industry. From the original small enterprise, they developed into today's LED listed companies. Due to the low technical threshold of the LED industry, many funds have entered the industry, which eventually led to the formation of overcapacity in the same way as the PV industry. In order to break through, companies began to compete in disorderly price wars, which reached its peak in 2015. The data shows that in 2015, more than 20% and about 5,000 LED-related companies have withdrawn from the market. Among them, as the LED chip industry, it has also experienced the competition of price wars, and the industry has undergone a round of reshuffle. According to the reporter's understanding, there are currently about 15 domestic LED chip companies operating normally. These 15 companies are from the 50 companies in 2010 and have remained after the price war. Liu Wei said that the price of LED chips has dropped 10 times in the past three years. Although the cost has decreased, it is far from enough compared with the price decline. Therefore, LED companies have a hard time, and originally had a gross profit margin of 50% to 60%. There is almost no profit in the first quarter of this year. Now the price of each piece is around 200 yuan, and there is some profit margin. In Liu Wei's view, the LED industry competition will continue, but this kind of competition will tend to be stable, because the price war between enterprises is not large. In the chip, Sanan Optoelectronics, Huacan Optoelectronics and other companies are expanding production, but the amount of each family is not large, expansion may lead to overcapacity, but like the price of previous years, the possibility of losing order is not great. Industrial oligarchs will form LED industry researcher Zhang Kang told reporters that the current competition in the LED industry has evolved from the previous disorderly competition to the current orderly competition, and the price space has been reduced to a minimum. Although there may be price competition in the future, there will be no bidding. There are fewer and fewer companies that have capital to cut prices. In the global macroeconomic downturn and the lack of LED backlight and display demand, Sanan Optoelectronics, Huacan Optoelectronics, Ganzhao Optoelectronics, Aoyang Shunchang and other corporate chip capacity expansion against the trend, further intensified the LED chip market competition, chips The price war of the manufacturers will intensify and the industry consolidation will continue. In addition, the growth rate of LED lighting demand has slowed down markedly, and the competition in the industry has intensified. As the most upstream chip link in the LED lighting industry chain, the pressure is increasing. According to the statistics of LED industry institutions, the total LED industry in China is expected to reach 396.7 billion yuan in 2015, up 15.1% year-on-year. The output value of LED chips is 13 billion yuan, up 8% year-on-year, but the output of LED chips has increased significantly year-on-year. 60%. At present, there are 15 domestic LED chip companies, but this is not the final market structure, and the reshuffle will continue. Liu Wei told reporters that although the price war has not been reduced, the price competition will continue. After the next round of reshuffle, these 15 companies may eventually have about 5 left and more concentrated. Liu Wei further analyzed that San'an Optoelectronics is currently ranked first, accounting for more than 30%, and we are second, accounting for more than 10%. After three years, two monopolies will be formed. It is estimated that the market share is about 70%. Our proportion may be around 30%, and the first ratio is about 40%. Government subsidies may be tightened as an emerging industry of the year, the LED industry is developing at a high speed, and government subsidies play an important role. According to public information, China has subsidized the LED lighting industry since 2009, and the subsidy is very large. In 2013, the LED industry ushered in a policy spring, from the State Council to the local government have introduced policies to promote the LED industry. At present, government subsidies still account for half of the performance of many companies. According to statistics, Sanan Optoelectronics, a brother of the LED industry subsidy, received more than 3 billion yuan in subsidies from 2010 to 2015. In 2010, Sanan Optoelectronics received a total of more than 700 million yuan of government subsidies, accounting for 60% of 2010 net profit; in 2011, it accounted for 86%; in 2012, it accounted for 60%, accounting for 2013 The ratio is 45.7%, and the proportion in 2014 is still around 50%. In 2015, it accounted for 28%. In addition, Dehao Runda is also one of the beneficiaries of government subsidies. From 2009 to the first half of 2014, Dehao Runda's government subsidies for the current profit and loss were 8,100,300 yuan, 265,560,400 yuan, 31,026,400 yuan, 22,422,900 yuan, 23,023,900 yuan and 64,430,800 yuan. Liu Wei said that from the perspective of government subsidies from two perspectives, in the early stage of industry development, government subsidies are to promote better development of the industry. However, it is painful from the individual enterprise. Since the country has subsidized so much money, there are many subjects involved in the competition. The market cannot carry so many subjects, and the competition will be very cruel. The cost and management advantages of the remaining companies will be highlighted. In the eyes of the industry, after a round of shuffling, the target of government subsidies will change, and will not subsidize as much as before. It will subsidize those enterprises that can become the top few in the industry. Some small and medium-sized enterprises want to take subsidies again. It is unlikely. Moreover, government subsidies have begun to decline and the subsidy has narrowed. According to Liu Wei’s analysis, from the perspective of competitors, the government has also seen this stage clearly. The remaining companies will participate in international competition, and government subsidies will replenish these enterprises. This is a healthy subsidy. Competition in the LED industry will continue, but the situation will not be so fierce, relatively stable, and fewer companies can cut prices. Therefore, the price will tend to be stable, and the performance of LED companies will be further improved.

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