General Electric chairman and CEO Immelt repeated the "green is green" in many occasions (green is the greenback). In the era of the global “green economy” surge, the emerging high-tech industries of green environmental protection will undoubtedly be the prey for capital competition. LED is one of the brightest “stars”.

However, since the beginning of this year, the LED industry, once once in great popularity, has fallen into the quagmire of “overcapacity,” “price deflation,” “lack of core technology,” and “no market access standards.” Industry insiders frankly stated that LED is “cool and chilly”.

Asymmetrical industrial chain

To replace the incandescent lamp as a new light source, LED is hailed as the last straw, and the entire LED industry will be held in the lighting field.

In early August, the National Development and Reform Commission promulgated the draft of “China's Roadmap for Phase-out of Incandescent Lamps”. Starting from October 1st next year, it prohibits the sale of incandescent lamps for general lighting of 100 watts or more. From October 1, 2014, sales are prohibited. Incandescent lamps for general lighting and above... From October 1, 2016, it is prohibited to sell and import incandescent lamps for general lighting of 15 W or more.

The elimination of incandescent bulbs has injected a "strengthening drug" into the LED industry. Investors admiring it can be said to have "flavoured". According to statistics, the investment made by non-LED companies in the LED industry from January to July has become the LED industry. To obtain an important part of the investment, such projects account for more than 45% of all investment projects, and the amount exceeds 65% of the total investment amount.

Recently, only listed companies such as BDO Runda, Han's Laser, Konka, etc., have successively made large-scale purchases or capital injections of equity in several Shenzhen LED companies; Sanan Optoelectronics spent 2.5 billion yuan in building factories in Fuzhou; Lehman Optoelectronics and Zhouming Many LED companies such as science and technology have announced their involvement in LED lighting. However, under the backdrop of the grand blueprint for development in the Central Plains, the hidden dangers of prosperity have also surfaced.

The upstream part has always been an area favored by capital, and the surging capital can even be described as “crazy”. According to CSA data center statistics, only January-July 2011, China's LED industry plans to increase the total investment of 125.168 billion yuan, the upstream substrate and epitaxial chip is still the focus of investment and hot spots, respectively reached 20.748 billion yuan and 36.796 billion yuan , accounting for 16.52% and 29.29% of the total investment. The number of MOCVD that has been explicitly planned for the epitaxial chip investment project has reached 1,266 units, which is four times the current domestic ownership.

This year, the largest number of movements is the Inner Mongolian Mengxi Group. This traditional cement manufacturing company in the Ordos Plateau will invest 27.5 billion yuan in the next 5 years for the production and R&D of LED products, and its wholly-owned subsidiary, Hua Yanxin. Guang (Beijing) Technology Co., Ltd. is responsible for implementation.

For some large corporations, local governments are "preferred." Sanan Optoelectronics announced on September 28 that it plans to invest 2.5 billion yuan in the development and manufacturing of sapphire substrates in Quanzhou, Fujian Province. For this project, the Anxi County Government of Fujian Province has given a series of preferential support measures. Within five days of the start of the project civil engineering project, a special award fund of 300 million yuan was given.

"The government's subsidies are very high. The upstream MOCVD and extension stoves have subsidy from local governments, which also gives investors a good reason," Zhang Xiaofei, director of the Gaogong LED Industry Research Institute, said in an interview.

Compared with the upswing in the upper stream, the downstream is a lot colder and can be said to be "chilly."

According to the statistics of the China National Engineering Research Institute of China National LED Industry Corporation, from January to July this year, the average price reduction of LED chips is 25%, and the maximum price reduction rate is 42%. The average LED package price is reduced by 23%, and the maximum price reduction rate is 37%. The average price reduction of LED applications also reaches twenty one%.

However, the market performance is very "not to force", environmental protection and durable LED lighting products into the "price is still no market" embarrassment.

"The price drop is related to the excess production capacity in the upstream, but the decline is still operating at a high level. The downstream is still not digesting. The upstream investment is too blind and it is too optimistic for the future market. The investment in the entire industry is very large, and the planned production capacity is probably It's 11 times the demand." Zhang Xiaofei said helplessly.

This is a time bomb

"There is too much water in the upper reaches, and there is not enough irrigation in the middle reaches." Zhang Xiaofei made an analogy to reporters when he introduced the LED industry.

Due to the lack of core technology patents, the domestic LED companies' living conditions are generally affected by costs and prices. Once the market conditions become negative, corporate profits will be immediately affected.

The domestic traditional lighting company Sunshine Lighting revealed in the 2011 interim report that the company’s net profit decreased by 25.09% year-on-year during the reporting period, which was mainly due to the increase in labor costs and the market price of rare earth tri-phosphor phosphors, which are important raw materials, soaring from 300 yuan/kg to the highest 3000 yuan/kg.

Coincidentally. In its 2011 interim report, Lehman Optronics showed that during the reporting period, the company's consolidated gross profit margin was 30.93%, which was 8.29% lower than that of the same period of last year. The main reason was that the prices of most LED products continued to fall, with upstream materials such as gold, copper and iron. The sharp increase in metal prices has led to the continued rise in prices of metal materials such as gold wires, brackets and iron boxes.

According to Huicong Deng Baishi's deputy director of the ICT Division Zhang Benhou, LED epitaxial wafers and chips account for approximately 70% of the industry's profits, with packaging accounting for approximately 10%-20%, and LED applications accounting for approximately 10%-20%.

The lack of core technologies and technology patents has long constrained Chinese LED companies from becoming bigger and stronger. Deng Weiye, chairman of Leidi Optoelectronics (Shenzhen) Co., Ltd., revealed that 90% of LED companies are currently losing money. This is because many domestic manufacturers lack core technologies and their investment in innovation and R&D is very small.

Zhang Xiaofei told the reporter: “For foreign-funded enterprises like Osram, Philips, and Samsung, the number of patents is probably more than 2,000. Compared with foreign countries, China’s companies generally invest very little in research and development. Our investment is mainly in the purchase of MOCVD epitaxial furnace equipment. At the same time, it is only available from Germany's Aisikang and Veeco's two companies worldwide. These devices are an indispensable tool for producing high-performance chips."

At present, domestic LED companies in the industry's most critical substrate material technology, epitaxial wafer production core equipment, technology patents have long been monopolized by foreign companies, of which, MOCVD epitaxial furnace and related supporting technology is the highest end of the LED industry chain, and The situation of relying mainly on imports has greatly constrained the cost control in the upstream of the industrial chain.

While observing the Chinese LED market, it has long been that Philips, Siemens, Osram, GE and other major foreign brands have dominated the world. At the beginning of this year, China’s LED market had one more heavyweight “spoiler”. "- Samsung LED, the global revenue of 1.1 billion US dollars in 2010, ranked second in the world's LED, which is currently the world's truly from the LED epitaxial, chip, package, module to lighting applications, including the entire industry chain LED manufacturer.

Since entering China, Samsung LED has established a firm foothold in the Chinese market with its strong capital and good brand effect, but Samsung's layout has only just begun.

There is no market price

Although the lighting market is generally optimistic, at present, the penetration rate of LED lighting in China and even the world is still very low, and China's penetration rate is still less than 1%. "The current LED lighting is still mainly in more professional areas, such as government procurement, hotels, office buildings, and the real access to the people's home is not yet universal. This is the real big cake." Jihua Zhang Optoelectronics operations manager Zhang Yajun said.

"Ordinary 3W LED lights are about 30-40 yuan, Philips, Osram and other brands to hundreds of dollars or even thousands of dollars." The head of a home appliance store told reporters, "LED lights can not sell a few weeks, the price Still too expensive."

"The quality gap is quite large. Some small businesses even use the corners of the chip to make the production. The cost is only 1-5 cents. There is no quality assurance at all." Zhang Xiaofei called for, "It is imperative that we quickly establish market access standards. ”

Shakespeare said: "The weather in spring is like a woman's mood. It's changing." For the LED industry, although it is still immersed in "spring," the so-called huge profits era is gone forever.