The nation's first LED industry plan was scrapped
Recently, a news about Shenzhen ’s abolition of the “Notice on Printing and Distributing Shenzhen ’s LED Industry Development Plan (2009-2015)†triggered industry concerns that LEDs would follow in the footsteps of photovoltaics.
As for why it was annulled, Sui Shirong, chairman of the Shenzhen LED Industry Association, said that the Shenzhen Development and Reform Commission gave an explanation: "Some of the policies proposed in the" Planning ", especially the financial and industrial support policies, are in other levels of policy formulation. It has already been involved, no need to use this "Planning" again.
However, in March 4 years ago, when the Shenzhen Municipal Government released the "Planning", it also vowed that it was the action plan for the scientific development of the Shenzhen LED industry. "Through the implementation of this plan, Shenzhen will build an important R & D and production base for the LED industry in the country and even the world." Moreover, it is also the first LED industry plan in the country. Afterwards, many other cities made relevant plans based on it.
More noteworthy is that Shenzhen has always played the role of the leader of the LED industry in China. Taking the data cited in "Planning" as an example, at that time, among the distribution of domestic LED companies, 44.3% took root in Shenzhen, nearly double the 24.7% of the second-ranked Guangdong Province. The number of enterprises has accounted for most of the country. Therefore, the situation of the LED industry in Shenzhen has basically represented the general situation of the development of the industry in China. Therefore, this time when Shenzhen suddenly closed the book on LED, it naturally attracted everyone's speculation that the industry in the country has fallen into trouble.
Zhongke Good Lighting is a Shenzhen-born LED company. The company's general manager Roche said in an interview with the Beijing Business Daily that the news about the abolition of the "Planning" has not been known, but the industry has already felt the industry's Difficulties, the focus of everyone's attention is mainly on the production cost, the cost can not come down, coupled with the failure to sell, excess capacity is inevitable. In this case, it is not surprising that policy changes have occurred. For most people, in the face of Shenzhen ’s abolition of the "Planning", they are worried that the government has lost confidence in this market. For an LED industry that is still in the development stage, the market is still immature, and needs support, It may fall into the situation of "singing on all sides", and like photovoltaic companies, it will enter a period of painful consolidation, and some uncompetitive companies will fall.
"More chaos" behind high growth
On the one hand, it is called the sunrise industry, but on the other side, it is "spurned" by the government. What happened to the LED industry?
The reporter found in a random interview that for many people, LED is still a very unfamiliar vocabulary, a high-tech item still in the laboratory. China's LED industry started in the 1970s, accompanied by rapid economic development along the way. According to Chen Yansheng, deputy chairman and secretary general of China Lighting Appliance Association, since 2003, China's LED industry has shown a rapid, sustained and stable development trend. "Last year, LED maintained a growth rate of about 20%, and the industry scale was about 190 billion yuan. The current LED lighting industry covers the upstream and downstream industrial chains including epitaxy, chips, packaging, and application products." Another data shows that in 2012, LED The application in the lighting field maintained a growth rate of 40%, and lighting applications accounted for 28% of LED applications.
However, it is undeniable that behind these glorious data, it is the embarrassing side of the development of China's LED industry "more, chaotic, poor". Although the development speed is fast, the actual application rate is not high. Until now, China's LED lighting market share is less than 10%, and these products are mainly low-end products. When the global economy is declining, the sales market is shrinking, and companies naturally face a severe test.
In 2012, there were more than 80 LED lighting companies that closed down in Shenzhen alone; nearly 10% of the lighting companies in Foshan closed down; and LED lighting companies in Dongguan and Zhongshan also fell into a collapse. "In 2013, China's upstream companies producing LED epitaxial chips will become more competitive. It is not excluded that some companies cannot support it." Chen Yansheng said.
At the same time, many LED companies saw a significant decline in revenue and net profit in 2012. For example, Dehao Runda, a well-known LED chip company in the industry, achieved a net profit of 168 million yuan in 2012, a year-on-year decrease of 57%. In 2012, revenue decreased by 12.74% year-on-year, and net profit decreased by 88.07% year-on-year. National Star's 2012 revenue fell 11.87% year-on-year, and net profit fell 66.45% year-on-year.
Roche was deeply touched by the industry dilemma. "The company's orders and sales have developed well in the first half of last year, and from the second half of the year, especially after October, to the Spring Festival this year, the development situation is obviously not good, and there has not been much improvement after the Spring Festival. As of now, The company's order volume has dropped by 40% or 50% compared to the same period last year. "According to him, the company's sales last year were only 20-30 million yuan, but its 10,000-square-meter factory has a production capacity of 100-200 million yuan. In comparison, the company's output value is now less than 20% of its production capacity.
But the company was helpless. Roche said that now the company is mainly engaged in foreign trade and sold to the United States, Europe, South America and other countries. The overseas market accounts for up to 90%, and relatively few domestic sales. Now the foreign market is tightening and the domestic market cannot be opened. The company has done all the products in the LED industry chain, but nowadays, some products that do not have competitive advantages, such as lamps and light bars, are basically not done. "The price of the mid- to high-end products we have taken is unacceptable, and it is difficult to sell in the domestic market."
According to He Zaihua, a senior researcher of CIC consultants, the current LED industry is highlighting the "structural overcapacity" pattern, "the downstream applications, packaging, and supporting areas have a serious overcapacity, while in the areas of mid-to-upstream chips and epitaxy. The overcapacity of low-performance products, the serious shortage of high-performance products and a large amount of imports. Moreover, the current problems of the Shenzhen LED industry are exactly what the national LED industry is facing, and even in most regions, the structural excess crisis is more serious. "
Undeveloped encounters overcapacity bottleneck
"90% depends on exports, excess capacity", LED seems to be a replica of the photovoltaic industry, is it really like the photovoltaic industry, will it gradually decline?
"No," Roche replied affirmatively, LED has not been brilliant, and is still in the development stage, especially in China. The main reason for the current troubles can be summarized by the word "chaos".
Roche believes that the so-called overcapacity is actually too many products that do not meet the standards in the market, and too many small enterprises that have not reached the scale. During the rise of the LED industry, due to the huge temptation of economic and social benefits, major developed countries and regions in the world have formulated development plans, which have led to the continuous increase of R & D and investment in countries and regions, and promoted the rapid development of the LED industry. . The domestic market is naturally not to be outdone. Due to the strong support of the previous government, "plus the low barriers to entry, many companies have swarmed up. Especially in the absence of relevant industry standards, the product quality of the companies is uneven."
When talking about the cause of "structural overcapacity", He Zaihua analyzed, "First of all, in terms of the market, the domestic market is small and domestic demand is weak, while the international economy is declining and demand is shrinking. At the same time," anti-dumping "such as Europe and the United States has a great impact on corporate exports. In addition, in terms of technology, the technical barrier to entry in the high-end field is very high. In the context of the government's vigorous support for the entire LED industry, after weighing costs and benefits, a large number of companies have gathered in the low-end production field. "
According to statistics, as of now, no matter the size of the enterprise, there are 4000-5000 LED companies in Guangzhou alone, and the number in Shenzhen is still more than half. However, among these companies, few companies are particularly large and have an output value of more than 100 million yuan. It is one of the few. When a reporter from the Beijing Business Daily asked what the current enterprises needed most, Roche did not hesitate to answer "funds". The company has not lent any money so far and can only hope for financing by investment companies. However, it is puzzling that LED is one of the three strategic emerging industries in Guangdong Province. As the main support target of the government, related companies have not received the corresponding "welfare".
"Many monks have less porridge", Roche said helplessly that only 1% of the thousands of companies received support funds, and other companies simply could not get the share. In particular, LED production costs are high, and small enterprises can't make money simply relying on self-production and sales. It is understood that the production cost of LED lights is 30% higher than that of traditional lighting, and this is also becoming the source of the decline in corporate profits, the closure of companies, and the difficulty of opening the domestic market.
As for the difficulty of opening the domestic market of LED lighting, there is another reason, mainly due to local protectionism. According to people familiar with the matter, there are basically LED factories all over the country, and many provinces require the purchase of products from local manufacturers. "Even if the quality of our products is good and the technology is advanced, we will not be able to score at all."
In addition, some insiders directly pointed out that in fact, the current situation of "many, chaotic, and poor" LED companies is also related to the previous strong support policies. Caused the current severe overcapacity crisis, and it also spawned a strange phenomenon, companies rely heavily on the government; therefore, "the Shenzhen government abolished out of concern that continued support may cause a second photovoltaic industry. The root cause of the above plan ". He said in China.
As a representative of high-tech products, technology is the core, but Chinese companies do not have a competitive advantage in this regard. "Core parts like chips can only rely on imports. There are many small companies that don't even have R & D departments. They directly copy and fight the" price war ", which makes the originally unregulated market even more chaotic. Moreover, at the moment when protectionism in the overseas market is rampant, the certification barriers in the European and American markets are strengthened, and the pressure faced by the LED industry is by no means smaller than that of the photovoltaic industry.
"Excess" low-end and mid-range companies will be eliminated
The abolition of "Planning" should actually be defined as a sign. Enterprises and governments should reposition their roles in this process of rapid braking. "When the industry is struggling, it is the best time for them to adjust themselves and change and upgrade "Industry comments said.
He Zaihua believes that to solve the structural overcapacity crisis in the LED industry, it is necessary to start from both the enterprise itself and the government. From the perspective of the enterprise itself, on the one hand, it is necessary to actively expand the domestic market based on the overseas market; on the other hand, it is necessary to strengthen the research and development of core technologies while strengthening M & A and restructuring in the low- and middle-end sectors.
In this regard, companies have long known themselves. Roche said that in order to get rid of foreign barriers, the company is preparing to register a new brand abroad and set up a research and development institution to further expand the overseas market. At the same time, the domestic market will never let go. Recently, he is running around the country, hoping to find local companies to cooperate, sell semi-finished products to them or cooperate in other ways. "It is inevitable for LEDs to replace traditional lighting. We are well aware of the potential of this market." Authoritative organizations predict that by 2020, China's LED lighting market share will exceed 50%.
Therefore, some company leaders believe that opening the domestic market is still the path that domestic enterprises must go, "90% cannot rely on overseas markets like the photovoltaic industry, so the market is too unstable and the global economy is not good The protectionism triggered is likely to cause the destruction of the industry. It can be seen that from this perspective, Shenzhen's abolition of the "Planning" is a very sensible emergency brake. "
In addition, when the European and American markets are becoming saturated, it has become the consensus of many people to enter emerging markets such as ASEAN, which have huge demand and low cost. In the eyes of many companies, on the one hand, LED has not been promoted in some countries such as ASEAN and South Asia, and the market potential is large. At the same time, with the continuous development of the domestic LED industry, manufacturing costs are also decreasing. As far as foreign buyers are concerned, compared with ASEAN's "local manufacturing" in Vietnam, Laos, Shenzhen companies have obvious advantages in LED quality and technology cost.
In addition, Sui Shirong also proposed that in order to enhance the competitiveness of enterprise products, enterprises must highlight differentiation while developing products. Although the "Planning" was cancelled, Guangdong's designation of the LED industry as one of the three emerging strategic industries will continue to produce significant benefits for the development of the industry, and then, in the more intense wave of mergers and acquisitions, high-quality Companies with differentiated products are more competitive.
"From the government's perspective, what is urgently needed is to change the way of thinking, stop supporting the entire LED industry, and make full use of the market to eliminate the enterprises in the low-end production field." He Zaihua said.
"State subsidies have no fundamental role in changing the status quo of the market. They can only be tickling, and they may also cause companies to become over-reliant." Therefore, in the critical period of industry transformation, companies are enhancing their competitiveness through strengthening independent research and development. , The government should also "can afford to put down."
"Let the eliminated enterprise" dead "naturally, and the" surviving "enterprises may become bigger and bigger and have the ability to compete with foreign companies. With the current market capacity, at least half should be eliminated." At the same time, the government also Downstream enterprises should be encouraged to go upstream, and some special funds from the government should be used to encourage enterprises to transform and upgrade to high-end products when their operating conditions are relatively good.
Speaking of government support, Roche seemed a little excited. He eagerly hoped to accelerate the issuance of certification standards for LED products to standardize the company's listed products and promote corporate self-discipline.
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