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This year, the continuous closure of LED companies has really poured a cold water on this industry. Under the circumstance of a large amount of capital investment, immature technology and vicious competition, the risk of LED industry continues to increase.
Zhongshan billion LED business collapse
On July 2 this year, a lighting factory owner in Zhongshan City, Guangdong Province, which had a scale of more than 100 million yuan, suddenly lost his mind, and behind him was the loan of more than 50 million yuan and the wages of hundreds of workers. Recently, the Guzhen Town Government of Zhongshan City reported that the operators of Xiongji Lighting Factory were suspected of escaping, suspected of contract fraud and refused to pay labor remuneration. The local public security has launched a criminal case to form a task force to arrest Xie and other involved personnel, and transport the inventory goods to the public goods warehouse for storage. At present, more than 300 wages of more than 300 male employees have been paid by the Guzhen Town Government, and the 38 suppliers of Xiongji have not paid for more than 40 million.
It is not a new thing for a company to fail to escape. But the reason why this lighting factory named Xiongji has attracted people's attention is that the company has transformed LED production in recent years. Since the beginning of this year, many LED manufacturers have been closed down in China, including many enterprises with a scale of over 100 million or even billions.
Vicious competition becomes the cause of failure
The reporter learned that since 2010, as the country increased its investment in the LED industry, various favorable policies have introduced the LED industry into a frantic investment phase. The infinite yearning for future market profit expectations has led many traditional lighting companies to point their finger at LEDs, and Xiong Ji is one of them.
These companies that have turned around in a hurry are often technically backward, even if the production line is based on traditional lighting ideas. The low end of technology makes the product less competitive, and can only take the low-cost route to seize the market. It is understood that taking Xiongji as an example, the price of LED bulbs produced by it is only 3.8 yuan. According to this price, even the cost is difficult to fill. The final outcome of grabbing the market at a low price is that this lighting company with a scale of over 100 million yuan will be the first to die in the Chinese LED market.
In fact, according to industry sources, there are still many manufacturers like Xiongji. At present, Zhongshan, Guangdong is a concentrated area of ​​the LED industry. According to statistics from the Zhongshan Science and Technology Bureau, there were more than 1,200 LED companies in Zhongshan in 2012, including nearly 100 enterprises above designated size, employing more than 70,000 people. In 2012, the output value reached 35.65 billion. yuan.
Only in one area of ​​Guzhen is the largest professional lighting production base and wholesale market in China. In 2012, the total output value of lighting here reached 15.81 billion yuan, accounting for more than 60% of the national market share. Many of these companies do not have upstream core technology and only produce in the form of production and processing. The number of companies has soared, and overcapacity has caused them to drive down sales prices in order to compete for the market. However, the LED industry with a certain technical content must lower the price and maintain production. Many enterprises have begun to reduce costs in the parts and processes, and the products they produce are extremely difficult to guarantee in terms of quality. This vicious competition directly led to the current sluggish domestic LED production industry.
Industry norms urgently need to be introduced
"The government supports the development of the LED industry in terms of policies, but there is no guarantee in the technical specifications of the industry." Those familiar with the LED industry pointed out that the LED industry that seems to be booming is actually struggling. It is understood that the domestic LED industry started relatively late, most of the domestic enterprises did not master any core technology, most of the technology patents are in the hands of some large foreign companies.
Lack of technical support and the practice of expanding market size only at low prices have now proven unsuccessful. "Technically subject to people, but more importantly, the industry standard standards are vacant." The above-mentioned person told reporters that at present, LED is a gold mine, as long as it can be plunged into money. Under this kind of thinking, few companies will sneak into technology and research and development. In fact, the technology update in this industry is very fast. From 2010 to the present, in the crazy investment of the LED industry, the upstream epitaxial chip field has been the most involved in the funds. Due to the huge amount of capital required, domestic billions and billions of projects have been seen everywhere in the past two years. These projects are rarely seen today, and most of them become a means of financing.
The collapse of Xiongji once again sounded the alarm for the LED industry. At the same time, it has also attracted the attention of the government. As the largest LED industry gathering place, it is understood that Zhongshan City, Guangdong Province has already compiled the "Zhongshan LED Industry Development Plan", which will put the development of LED industry development policy and strengthen industrial planning on the agenda.
Industry cooling or providing opportunities for change
Since the collapse of LED companies this year, many companies blindly investing in the industry have increased their vigilance. According to the latest statistics of the High-tech LED Industry Research Institute (GLII), the newly-planned investment in China's LED industry in the first half of 2013 was 37 billion yuan, down 16% year-on-year. In 2013, the LED industry investment hotspot has been transferred from the upstream sapphire and epitaxial chip fields to the downstream application lighting field. GLII statistics show that in the first half of 2013, the newly planned investment in LED lighting sector was 23.2 billion, accounting for 63% of the total newly planned investment, down 19% year-on-year.
According to the data, in the first half of 2013, the newly planned investment in China's LED industry hit a new low since 2010. After nearly two years of crazy investment, the LED market situation is already quite serious. Entering into 2012, the capacity of the upstream epitaxial chip in the trapped area is seriously overcapacity, and industrial investment has already shown signs of returning to rationality.
Analysts pointed out that for enterprises lacking technical support and financial strength, the cooling of the industry provides a turning point. After more than two years of large-scale investment, the domestic LED lighting production capacity has been fully established. The cooling of investment will cause warnings for companies that are still planning to work.
According to GLII analysis, China's LED industry investment has become more rational, especially in the field of epitaxial chips and sapphire, and the investment fever has also rapidly subsided. The analysis pointed out that the current development of the LED industry is more biased towards the development of core technologies and the application of new materials technologies. "With a huge amount of capital investment, if the technology scale advantage is not formed, the road of the LED industry in the future is still not good."
(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.) 
Risk of bankruptcy exacerbates LED industry cooling or provides opportunities for change
The term LED is full of charm for many investment companies in recent years. Under the guidance of various favorable policies of the country, the domestic LED industry has witnessed a wave of crazy investment in the past two years. Stimulated by the ever-expanding income expectations, huge capital investment has created projects worth more than 100 million yuan.