Shenzhen abolished LED planning, Jiangmen LED downstream seeking breakthrough

A few days ago, the Shenzhen Municipal Government announced the abolition of the "Shenzhen LED Industry Development Plan (2009-2015)" news in the LED industry. In the national LED industry accounted for about half of Shenzhen, this move made the industry confused, more speculation that this industry will be abandoned by the government, there are voices that the current LED industry overcapacity, fear of the photovoltaic industry behind. Jiangmen industry insiders worry that this will have an impact on Jiangmen's LED industry policy.

The reporter learned from the Jiangmen City Economic and Information Bureau that according to the characteristics of the rapid development of the LED industry and the need to build a full industrial chain, Jiangmen has arranged 150 million special funds every year for LED technology innovation, talent introduction, brand building, standard formulation, etc. Aspects give policy support. Despite this, the reporter learned from various aspects that at present, several representative LED companies in Jiangmen have not been so moist, and can even be said to be in the cold winter.

“Because of the sluggish foreign market, coupled with the lack of testing standards and access thresholds, the industry is very chaotic, most LED manufacturers are short-term speculation, many like home workshops, buy chips for assembly.” Chairman of Zhenmingli Group Fan Bangyang said.

In addition to the impact of uneven quality in the industry and unregulated market behavior, the hoarding and sales of downstream products are the most important factors leading to the bleak performance of the entire LED industry. Since LED lighting products have not yet broken through the core technology and solved the problem of high cost, they are more commonly used in government projects and large buildings, and have not entered the families of ordinary people. Some researchers pointed out that "although LED lights have the advantages of environmental protection, but the high price still keeps most ordinary consumers in a wait-and-see state, it will take a long time for LED lights to enter home lighting."

Downstream products hoard, poor sales

In this environment, most of the current LED companies are difficult to achieve profitability under the circumstances of their own operations, and even the top executives bluntly said, "If there is no government subsidy, some companies will not even be able to sustain it."

Deli Optoelectronics is also a beneficiary of government subsidies. According to the 2012 financial report of ST Ganhua (Deli Optoelectronics is a wholly-owned subsidiary of ST Ganhua), the government subsidy included in the current profit and loss is 72.832 million yuan. If there is no government subsidy for the “snow in the snow”, ST Ganhua last year. The actual loss was 25,619,100 yuan, and all of this benefited from the huge determination of the Jiangmen Municipal Government in developing the LED industry.

Fan Bangyang, who has invested more than 10 billion yuan in LED production and R&D, is frowning. He admits that the company has been in a state of loss for the past two years. On the one hand, due to the economic downturn in the European and American markets, LED investment on the other hand. Larger. The reporter learned that in the upstream chip manufacturing field that Jiangmen City government subsidized, Zhen Mingli purchased a total of 14 MOCVD equipment, 9 of which can get 10 million subsidies per government. So far, Zhen Mingli only got 4 points. The subsidy of one, and the huge amount of R&D investment, it is difficult to achieve the effect of balance of payments. At the same time, in recent years, Zhen Mingli has rarely made a small gain in government orders, which is even worse for its solution to the problem of returning funds.

After Shenzhen's LED industry planning was abolished, various speculations in the industry were mixed, and industry experts and industry insiders gave strong negative opinions on the overcapacity in this industry. "LED is different from the photovoltaic industry. The demand of the photovoltaic industry is not as big as people think. The long-term sunshine in the country is only in the area of ​​Gansu, Xinjiang. But the LED industry is different. It is a civilian demand. It can be said that there is night. There must be lighting in the local area, and there should be LEDs in the future. This is the future development trend. With a huge civilian market, consumers can directly benefit." An expert who did not want to be named analyzed the report to reporters.

According to reports, Lin Zhenxian, deputy general manager of Guangdong Deli Optoelectronics Co., Ltd., holds a Ph.D. in materials science from UCLA. He has many years of experience in manufacturing and research and development of LED extension chips. He is the inventor of several LED patent technologies. Regarding the overcapacity, Lin Zhenxian believes that due to the influx of various hot money due to government subsidies, there is a problem of upstream LED extension and rapid development of chip companies. "Now it is a one-time purchase of the equipment needed in the next few years. However, due to the failure of the civilian market to open, downstream demand can digest the upstream products.

Lin Zhenxian pointed out that in 2010, the equipment for upstream chip manufacturing was not enough. However, after the government subsidies, there was an oversupply. From 2011, it took three to five years to slowly digest. “I expect that the balance of supply and demand for LEDs will improve in 2014 and will see better development in 2015.”

Government subsidies and municipal orders become "life-saving straw"

The abolition of the Shenzhen LED industry development plan, the industry speculated that Shenzhen may no longer support the development of the local LED industry, some experts pointed out that this may be an important opportunity for Jiangmen, because if Shenzhen give up supporting this industry, very It is possible to cause LED companies to shift to Jiangmen, which is undoubtedly good news for Jiangmen, which attaches importance to and is determined to develop the LED industry. “As long as Jiangmen insists on LED as the key strategic emerging industry, the support is unchanged, and Jiangmen is close to the geographical advantage of Zhongshan Guzhen, Jiangmen’s LED development is promising.”

However, Jiangmen LED Industry Association is not optimistic about this. He told reporters that in fact, there were also companies from Shenzhen and other places that came to Jiangmen to investigate and select sites for enterprises. "But there are many people who come to see it. There are very few companies that really land. Because Jiangmen said that there are supporting facilities, it is really difficult to implement. And because of insufficient financial resources, the government's research subsidies and inputs are very limited, often giving people a kind of thunder. The sound is loud and the rain is small."

In this regard, a high-level enterprise of Jiangmen LED also confirmed this statement, he said that Jiangmen's LED industry policy planning is very good, but the supporting can not keep up. "My company has applied for electricity for a long time, but the government has not been able to provide it so far. The government's fiscal budget is weak, but it is understandable, but it cannot provide hydropower. Without a supporting environment such as a sewage treatment plant, enterprises can solve their own problems. I think every company will make choices from its own perspective."

In the face of industry development vigilance from Shenzhen, experts and industry insiders believe that the government should adjust the focus of support, from subsidizing upstream enterprises to directly subsidizing consumers, stimulating the demand for downstream products. The Nanfang Daily reporter learned from the Jiangmen LED Industry Association that Jiangmen’s subsidy for the purchase of LED key equipment for upstream LEDs will expire on December 31 this year. Yin Yusong told reporters that the focus of Jiangmen's LED industry support this year will be adjusted according to the actual situation of industrial development, from the previous support for the extension of upstream LED chips, to the support of the midstream package, and now support the downstream application industry.

Government support focus should be tilted downstream

The reporter learned from the Electronic Information Section of Jiangmen Economic Information Bureau that Jiangmen will continue to support the development of the local LED industry as always, but the focus will be on the downstream industries, and new policies will be introduced in the near future. This year, Jiangmen issued the “Preferential Measures for the Development of Strategic New Emerging Industries (Jiangmen Green Light Sources) in Jiangmen City (Draft for Comment) (hereinafter referred to as “Opinions”). The focus of the "Opinions" is to promote product applications and support the entire LED industry chain. The content includes, after bidding, encourage government procurement projects to prioritize the use of local products under the same conditions to create a self-owned brand of Jiangmen LED products. For the procurement of public lighting in the LED product catalogue products of Jiangmen City and the lighting projects of government agencies and institutions, a total of 20% of the total purchase amount will be awarded, up to a maximum of 200,000 yuan.

Despite this, industry insiders told reporters that in recent years, Jiangmen’s two municipal LED orders have been taken away by Dongguan enterprises, and the Dongguan government has issued a number of policies to replace road lighting and new LED street lights more than 30,000 baht, the main road lights The rate is 100%, and the LED lighting rate of public indoor lighting reaches 70%. The construction of lighting in public places such as municipal engineering construction in the two places is in sharp contrast to the development of the local LED industry.

According to the latest data, from July 2012 to April 2013, Jiangmen failed to rank in the top ten in the ranking of the total number of LED street lights and tunnel lights in Guangdong Province. The top city is Qingyuan 81,093, followed by Guangzhou, Zhuhai, Shenzhen and Dongguan. "Jiangmen has not had many orders, but it has to be lost in competition with other cities, so that local LED companies can be described as sighing."

Foshan takes a step forward in subsidizing LED indoor lighting renovation. The reporter learned that before December 31, 2013, Foshan Chancheng will provide up to 15 million yuan to subsidize LED indoor lighting promotion, and each watt will receive a government subsidy of up to 5 yuan. The reporter learned from the Jiangmen Economic and Trade Department that Jiangmen has no plans to implement such subsidies.

(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.)