The LED market is booming, how should companies meet?

Since the beginning of this year, the market demand for LED lighting downstream applications has continued to grow faster than expected, which has directly driven the rapid digestion of midstream packaging and upstream epitaxial chip production capacity. Some companies even have a rare order queuing phenomenon last year. Many enterprises in all links of the industrial chain have full capacity for 24 hours, but the situation of product shortages still occurs to varying degrees. So, what caused such a hot market demand? How long can this wave of market last?

The whole industry chain is hot

"As the price of LED lighting products has dropped, the company's sales have also experienced explosive growth." Li Xuliang, chairman of LED lighting application company Qinshang Optoelectronics Co., Ltd., said, "At present, the company's 24-hour full production, but still can not satisfy customers Demand, it is necessary to outsource some production links. "

The rapid growth of the downstream lighting market brought a large number of orders to midstream packaging companies. "In the first few months of this year, packaging orders have already put our production line at full capacity, mainly due to the increasing demand for downstream applications in the domestic market." Luo Jing, deputy general manager of marketing of packaging company Zhejiang Zhongzhou Optoelectronics Co., Ltd. said, "early this year Since then, traditional lighting companies have stepped up their efforts to transform LEDs. Companies including NVC, Hongyan, and Delixi have placed a lot of orders for packaging plants. "

At mid-stream, packaging companies at full capacity have gradually transferred the positive market to the upstream. "After May of this year, the industry has undergone a major turning point, which was unexpected for entrepreneurs and experts in the entire industry." Everyone thought that the turning point of the industry would appear in 2014, and now the signs of supply shortage are already very obvious . "

"There are two main reasons behind this phenomenon." Zheng Tiemin said, "One is that it has an important relationship with the start of the indoor lighting market, and the second is because the domestic LED lighting companies, especially upstream companies, have not started enough work." Zheng Tiemin said From the second half of the previous year to last year, due to reduced product profits and oversupply in the market, domestic manufacturers generally under-started, and the equipment was basically not 100% operated, and the market supply and demand remained balanced; this year, market demand increased suddenly, but the equipment needs to be fully activated In one process, the production capacity could not keep up, so there was a shortage of supply.

Wang Haibo, vice chairman of the China Lighting Association and director of the Institute of Electric Light Source Materials of Nanjing University of Technology, also agreed with this view. "On the one hand, the market situation was not good some time ago, and enterprises in the upstream, middle and lower reaches of the industrial chain, including the circulation field, basically sell their production and do not dare to have inventory. For example, chip manufacturers generally have an operating rate of less than 50%." It is also because the price-performance ratio of LED lighting products has the basic conditions for market sales and has been accepted by ordinary consumers. After all, its price is not much more expensive than energy-saving lamps. "

Chen Yansheng, chairman of the China Semiconductor Lighting / LED Industry and Application Alliance, also believes that the improvement of the cost performance of LED lighting products is an important reason for the rapid growth of the market. "As the price of LED lighting products decreases, the price-performance ratio continues to increase. From the perspective of the domestic market, LED lighting products were mainly used in projects such as hotels, shopping malls, parking lots, etc .. At present, household consumers who use LED lighting products More and more, the retail sales of distributors have increased, naturally driving manufacturers to increase production. From the perspective of foreign markets, the demand for LED lighting products has also maintained growth, and the growth momentum has been very obvious since last year. "

Rationally view the rapid market growth

The continuous and rapid growth of the LED lighting market has led to two views in the industry. One is that the explosive growth period of the LED lighting market was expected to arrive early in the next year. To this end, a number of LED companies have recently indicated that they are expanding production, and many of them are new companies. There are also rumors that Dehao Runda will build 500 LED packaging production lines, and news that the once-disrupted NVC Lighting and Ruifeng Optoelectronics established a joint venture has also been reported to be resurrected. Another pessimistic view is that this is only a temporary phenomenon, and the market will soon oversupply again.

"I think these two views are too extreme." Wang Haibo said, "Just like the speed of road repairs can't keep up with the growth rate of cars, the market development speed can never be faster than the increase in production capacity. LED lighting products are such modernized This is especially true of the efficient production system. Moreover, we are not without production capacity, but the previous production capacity has not been fully opened, so the statement of explosive growth is naturally untenable. At the same time, the market share of LED lighting products is very small, and the potential market is still very large. Coastal cities infiltrating into inland cities and then to rural markets also need a process that consumers understand and accept. This level of consumption also determines that the growth of the LED lighting market will not be short-lived. "

"I don't quite agree with the market's" explosion "or" outbreak. "Chen Yansheng emphasized," Although the market situation is good now, the restlessness of enterprises should still be suppressed. The improvement in the cost performance of LED lighting products is driving the market from The downstream of the industrial chain is pushed to the middle and upstream. The rapid growth of the downstream market has allowed midstream packaging companies to gradually recover from insufficient construction to production capacity, but the situation of upstream epitaxial chip companies is not all very good. Small-scale enterprises may not benefit from it, so they should still Look at the current situation both positively and negatively. "

"On the one hand, there are currently too many LED lighting production enterprises in China, and after large-scale products from powerful large enterprises will suppress the growth momentum of small enterprises, it is conducive to promoting industrial integration, which is a positive impact." Chen Yansheng said, "other On the one hand, although market demand growth is normal, it is not normal to increase too much at once. For a certain company, it is possible to double sales, but for the entire industry, this growth Is it sustainable? Is it still a question. Will blind production bring about the problem of suppressing the warehouse? After the product reaches the dealer, can it be sold to the consumer? "

"From the perspective of the law of market economy development, this hot market is temporary, but it will continue for a while. With the increase in capacity utilization, the market will maintain a dynamic balance from short supply to oversupply," said Zheng Tiemin. "We are pleased to see that the domestic LED lighting civilian market is starting, not only the urban market, but also LED lighting products have appeared in the large collections of many towns." Zheng Tiemin emphasized that the concept of "rural surrounding cities" is equally suitable In the LED lighting market, only after the rural market that occupies the main market share is launched, China's LED lighting will usher in a real spring.