After the price war of LED lighting in the past few years, the price surge in the middle and upper reaches of the first half of this year and the reshuffle of the industry, in order to prepare for the battle of LED lighting industry in 2018, LED companies began to gradually adjust their products and market strategies to cope with The last round of market battles.
In the first half of last year, Philips was able to significantly reduce the price of LED bulbs in the North American market in advance. Dongbei Optoelectronics, a new cost-competitive new-architecture product, was forced to take the morning market in response to the rapid changes in the market.
Recently, Wu Qinghui, chairman of Dongbei Optoelectronics, the largest LED bulb manufacturer in Taiwan, revealed that it will adjust the production capacity ratio of existing products, reduce the production capacity of conventional LED bulbs, and switch to LED lighting products with more profit protection. The move is also to be able to differentiate from the “low-cost†market for bulb manufacturers in mainland China.
According to the plan, Dongbei Optoelectronics will reduce the current monthly production capacity of 10 million LED bulbs to 3 million. Wu Qinghui revealed that this will directly lead to the bulb business that currently accounts for 60% of the company's lighting business revenue, which will drop to around 20% in 2017. At the same time, based on the adjustment of the product mix, the revenue from linear LED (straight tube) lamps and outdoor lighting fixtures is expected to increase from the current 40% to 80%.
Wu Qinghui said that such product mix adjustment is expected to increase the gross profit margin of LED lighting source business by 10 percentage points in 2017, and will contribute 5 percentage points to the growth of the company's business gross margin.
Dongbei Optoelectronics is currently the largest LED bulb manufacturer in Taiwan, with its main customers coming from retail channels with a focus on the North American market. In 2015, Dongbei Optoelectronics received the brand authorization of Toshiba in Europe, which brought in a business contribution of 6-7 million US dollars.
Dongbei Optoelectronics expects that this business (authorized by Toshiba brand in Japan) will reach 15 million US dollars in 2016 and 30 million US dollars by 2017.
In terms of product technology enhancement, Dongbei Optoelectronics will launch low-light and non-strobo LED bulbs in 2017. At the same time, it will also start a smart LED lighting system with a North American partner. Earlier this year, Dongbei Optoelectronics and Sercomm, a manufacturer of broadband and wireless networking equipment, had a partnership for smart lighting research and development.
Dongbei Optoelectronics hopes that LED lighting and backlight business will each account for 45% of the business contribution portfolio in 2017, and become the company's most solid source of revenue. At the same time, LED lamp business accounted for 6%, and infrared LED business accounted for 4%.
In the traditional LED backlight business, Dongbei Optoelectronics will supply about 2,000 notebook backlight module LEDs in 2016, which will reach 30 million units by 2017.
In terms of TV backlight, Dongbei Optoelectronics has already received new customer orders, and began to supply in October this year. The full delivery of orders is expected to be in the third quarter of next year. Dongbei Optoelectronics expects to supply about 5-6 million battery backlight module LEDs in 2017, with shipments increasing by 25-50% annually. According to this capacity scale, the global market share of LED TV backlights accounts for about 5%.
In terms of capacity expansion, Dongbei Optoelectronics' new plant in Xinbei, Taiwan will be fully produced in the middle of next year.
In order to better protect the expansion of the overseas market in the future, in January 2016, Dongbei Optoelectronics signed a patent licensing agreement with Osram to obtain Osram's core patented technology for phosphor-converted LEDs to produce white Led Light-emitting devices. At the same time, OSRAM agreed to revoke its patent infringement lawsuit against Asustek's customer ASUS in Germany.
The latest financial data shows that Dongbei Optoelectronics' revenue in September was about US$22 million, down 0.84% ​​month-on-month, but up 27.27% year-on-year. The third quarter revenue season increased by 3.03%, an increase of 35.33% over the previous year. As of the first three quarters of this year, revenue increased by 1.18% year-on-year.
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