GLII Releases Report on China's LED Downstream Application Market in 2012

According to GLII statistics, the total output value of China's LED industry in 2011 reached 154 billion yuan, a year-on-year increase of 22%. The output value of upstream epitaxial chips, midstream packaging, and downstream applications of LED chips were respectively 6 billion yuan, 32 billion yuan, and 116 billion yuan, which was a year-on-year increase of 50%, 19%, and 22% respectively.

In 2011, China's total LED output value was 116 billion yuan, a year-on-year increase of 22%, and the growth rate was significantly lower than expected. This is mainly due to the rapid decline in the prices of midstream and upstream products. In addition, international economic instability factors such as the European and US debt crisis are also one of the important factors affecting the slowdown in market demand growth.

In 2012, global countries or regions will successively introduce new policies to support LED applications. At the same time, with the continuous expansion and maturity of LED application products and application areas, it will directly drive the rapid growth of China's LED application market in 2012.

Gaogong LED Industry Research Institute expects that in 2012 China's LED application output growth rate will reach 30%, and the output value will exceed 150 billion yuan.





Lower prices than expected

In 2011, the prosperity of China's LED industry was greatly reduced, especially the overcapacity of LED upstream chip and midstream packaging. Compared with the beginning of the year, the prices of related products in the upper and middle reaches have dropped significantly, and the prices of LED lighting application products have also dropped significantly, among which:

Compared with the beginning of the year, the price of LED chips has fallen by more than 40%, and the lowest price reduction of low-end chips has reached 70%;

Compared with the beginning of the year, the price of LED packaging devices has dropped by more than 35%, and the lowest price of low-end packaging devices has exceeded 65%;

Compared with the beginning of the year, the price of LED lighting applications dropped by more than 25%, and the lowest drop of the low-end products exceeded 75%.

In 2011, the scale of the upper-middle-enterprise business slowed down significantly, more than 30% of medium-sized companies saw a drop in sales, and their gross profit margin dropped to between 10% and 20%. Many LED chips and packaging companies have suffered losses. Some of the LED chip projects and LED sapphire substrate projects that have not yet introduced equipment have been halted. Mass production companies have also stopped or slowed their expansion.

Compared with the LED chip and LED packaging industry, China's LED lighting application market has achieved better development. In 2011, the price of global LED application products decreased significantly, bringing closer the price gap between LED lighting products and traditional lighting products, making LED lighting products more easily accepted by consumers, promoting the development of LED lighting application market, and effectively promoting LED lighting. The popularity. As a major production base for global LED application products, China has achieved rapid development. Compared with 2010, China's LED application companies, especially LED lighting applications, have rapidly expanded their production scale and their efficiency has improved significantly. Among them, the proportion of loss-making enterprises is relatively small, and the overall scale has increased by more than 20%. With the increase in the level of LED technology, LED lighting products have demonstrated a very good price/performance advantage in individual segments.

As of the end of 2011, there were more than 6,000 LED companies in China, of which annual sales exceeded 50 million yuan, and about 1,000 companies had a certain scale. It is estimated that in the next 1-2 years, the number of LED companies in China, especially the application companies, will still increase at a faster rate.

According to statistics from the China National Engineering Research Institute of China National Semiconductor Industry Corporation, China has become the world's leading LED application and production base. In 2011, more than 60% of global LED application products were concentrated in Chinese production. At present, in addition to LED applications are very mature mobile phone backlight, laptop backlight, traffic lights, LED Display , lighting, display, LED indoor and outdoor functional lighting, special lighting, automotive lighting and other applications are also gradually mature.



In 2011, LED landscape lighting (including lighting) and LED display are the most mature areas for LED applications, with the largest proportion of output value, accounting for 26% and 19%, respectively.

In 2011, LED indoor general lighting and outdoor functional lighting were among the fastest growing areas, with output ratios of 16% and 4%, respectively. It is expected that there will still be greater growth in demand in 2012.

In 2011, the output value of LED special lighting accounted for 3%. LED special lighting is currently characterized by low-investment, high-profit products. However, there are various types of products. It is difficult for each product to reach a very large market demand within a short period of time. Smaller scale, more suitable for the development of SMEs.

Other LED application products such as flashlights and desk lamps have also become mature. The automotive lighting market in China is relatively small, and the output value of LED automotive lighting in foreign countries is relatively large.

However, at present, China's LED application industry still suffers from high prices, varying product quality, chaotic market competition, lack of application industry standards, lack of core patents, and low acceptability of ordinary people, which hinders the rapid development of LED applications to some extent.

LED lighting products overall performance is better

Although the profit of LED lighting products in 2011 was not as good as in 2010, the overall profitability was better than that in 2010 due to the significant increase in the size of the company.

Relative to the upstream LED chip, the mid-stream packaging product gross margin is generally only 10 to 20%, in 2011 more than 60% of LED application companies can maintain more than 20% gross margin.

According to the interviews with more than 500 major LED lighting companies conducted by the Institute of Advanced Industry and Industry, there are more than 100 companies with gross profit margins above 25% in 2011, and there are more than 250 companies whose gross margin can be maintained at 20 to 25%, with 150 The gross profit rate of domestic companies is less than 20%, of which more than 30 companies have gross margins of less than 10%, only about 7 to 10%, and the proportion of loss-making enterprises is relatively small.

Intelligent LED lighting products will be the trend

At the beginning of LED application lighting, the main task is to replace the traditional lighting, so we now see that most of the LED lamps, LED bulbs, etc. are basically similar to the shape of our traditional fluorescent lamps, bulb lamps, etc. The design considerations are similar to the main considerations for the idea of ​​replacing conventional lamps and are easily accepted by customers.

In fact, the LED replacement lamp that is simply manufactured according to the shape of the traditional lighting fixture does not reflect the best performance and characteristics of the LED itself. The LED is a solid state tunable light source and needs to be presented to us in its most ideal state.

With the accumulation of technology and continuous upgrading of products, intelligent lighting fixtures will be favored by users and will be the mainstream of the market in the long run.

Rapid growth in the number of enterprises and early entry into intense competition

According to the statistics of China National Engineering Research Institute for Advanced Industrial Science and Technology, from 2009 to 2011, there were more than 2,000 newly-added LED application enterprises. Among the newly added companies, 40% of the manufacturers are from traditional lighting manufacturers, and 30% of the companies are from new-entry companies or The original enterprise employees come out of business, 20% of the manufacturers are from the LED middleware package manufacturers, and the other 10% of the manufacturers are from LED material supply or the manufacturers who are optimistic about the LED prospects. All industries are competing to enter the LED lighting industry.

In 2011, China increased the use of thousands of LED applications. Newly-increased companies focused on small-scale investment and transformation of traditional lighting companies, but large-scale investment projects also far more than in previous years.

Under the blind investment and irrational investment, the growth rate of the LED industry's production capacity is much faster than the market's demand growth rate, and enterprises have entered a stage of fierce competition in advance.

Analysis of Regional Distribution of LED Application Enterprises in China

China's LED industry has formed a relatively complete industrial chain, basically forming the Pearl River Delta (Guangdong), the Yangtze River Delta (Zhejiang, Jiangsu, Shanghai), the northern region (Beijing, Hebei, Shandong, Shanxi), Fujian, Jiangxi and other regions. Area.

LED application enterprises are mainly distributed in the Pearl River Delta and Yangtze River Delta. The number of LED application enterprises in the Pearl River Delta region accounts for nearly two-thirds of the total number of LED application companies in China, accounting for 65% of the total.

The advantage of the Guangdong region lies in the relative perfection of the LED industry chain, and the number of related materials, accessories and equipment supporting enterprises, and the number of LED packaging companies also accounts for more than two-thirds of the country.

In the coming years, Guangdong will continue to enjoy its advantages in the industrial chain. It can be seen from the listing of Alto, Zhouming, Lehman Optoelectronics, Lianhe Optoelectronics, Wanrun Optoelectronics, and Longfang Lighting that the Guangdong Province is in the field of application technology scale. On the leading position. In the LED industry, it will occupy the leading position for a long time.

Ranked second in the Yangtze River Delta region, the number of LED application companies accounted for 17%.

In the Yangtze River Delta region, the economically developed Yangtze River Delta has a wide application market, and is also the fastest growing area for LED application companies and scale in China.

The support for LED policies in the Yangtze River Delta region is greater than that of the Pearl River Delta as a whole.

The number of LED application companies in the northern region is small, accounting for only 9% of the country's total.

From the perspective of investment this year, the LED investment in the northern region has increased by a lot compared with last year. It is believed that in the future there will be a group of new LED companies established in the northern regions, and most of them are application companies. However, the number of LED companies is still not in the leading position. Compared with the Pearl River Delta region, the distribution of LED application companies in China is uneven, and its main distribution is mainly based on the LED industry chain. The more centralized and perfect LED industry chain, the more concentrated regional LED application companies, and the LED industry chain is more decentralized and incomplete.

The coming wave of listing

From 2010 to 2011, China had 16 LED-based business enterprises, of which only in 2011, there were 13 LED companies listed in China.

Among the LED companies that had passed the conference in 2011, there were 5 LED application companies, 6 LED packaging companies, and 1 LED supporting equipment and material company. The meeting rate reached 100%, but after the LED packaging company Mulinsen passed the meeting, it failed to achieve a market for more than six months and the listing was blocked.

There are 16 companies that have passed the conference. From the perspective of the trading market, 6 small and medium-sized board of Shenzhen Stock Exchange and 10 companies of GEM are selected. From a geographical point of view, there are a total of 13 cities in Guangdong Province, and a total of 9 in Shenzhen, Guangdong Province.

There were 16 companies that had passed the conference. From the perspective of the meeting time, there were more than 13 conferences in 2011 and the most intensive in December 2011. Six LED companies had gathered in two weeks.

LED application companies have launched fierce competition on the market. As of 2011, China has completed more than 50 LED companies that have completed share reforms. A total of 100 LED companies are undergoing share reforms or have completed share reforms. China's 50% annual output value exceeds 100 million yuan. Yuan's company has a listing plan.

For more information on the applications of China's LED downstream applications, please refer to the “China's LED Downstream Application Market Research Report 2012” newly launched by Gaogong LED Industry Research Institute. This report conducts detailed research and analysis on the development characteristics, major products, output scale, price changes, investment conditions, major enterprises, competitive situation, policies, investment risks, investment advice, and market development trends of the LED application industry in China in 2011. .