This year is an extraordinary year for the LED industry. By the end of the year, the LED industry has set off a new wave of price increases. Because of strong demand and rising raw material prices, prices have risen.
When talking about price increases, Bian Difei, vice president of Huacan Optoelectronics, said, “The recent rebound in LED chip prices is expected to continue and continue into the end product segment. The rising cost of raw materials and other factors is a dominant factor in LED price increases. During the period of vicious low-price competition, the profit space of all links in the entire industrial chain has been compressed to the limit, and product price increases become inevitable."
At present, the competition in the LED industry is still fierce, but it has gradually shifted to benign competition, because the space for price war between enterprises is getting smaller and smaller. With the National Development and Reform Commission releasing the new policy of “China's phase-out of incandescent light roadmap†and the improvement of consumers' product quality requirements, the era of low-quality and low-price competition has become a thing of the past. The competition in the LED market will be more orderly.
Biandi Fei said in an interview with Gaogong LED reporter that "the LED market has recently shown a state of both supply and demand. The LED chip industry is a capital and technology-intensive industry. As the industry matures, the market share will be technology-oriented. Enterprises with economies of scale are accelerating their concentration.†Enterprises represented by Huacan Optoelectronics are constantly expanding their market share, and the concentration of the chip industry is constantly improving.
For chip companies, the implementation of the LED industry chain upstream and downstream and supporting enterprises through project implementation will help to further expand the company's scale and cost advantages, and enhance the company's core competitiveness and industry influence.
Huacan Optoelectronics is more optimistic about mergers and acquisitions in those industries or based on the upstream and downstream of the industry chain. In addition, Huacan Optoelectronics has been actively expanding production in the past two years. The LED epitaxy, chip and industrial chain extension projects mainly focus on building internationally renowned LEDs. The industrial base is under development.
For example, Huacan Optoelectronics acquired Yunnan Blue Crystal in 2015; in 2016, it acquired US New Semiconductor. At present, Huacan Optoelectronics has also received many international cooperation intentions. The next step is based on the gradual expansion of production capacity, and the internationalization of the lighting market will be fully opened.
Talking about the market layout of Huacan Optoelectronics next year, Bian Defei said that most of the global capacity expansion in the future will be completed in the mainland. Huacan will continue to actively expand its production next year. In the emerging market areas such as UV, IR, smart lighting and LIFI, Huacan is also actively seeking opportunities and making technical reserves.
Looking forward to 2017, the LED market competition is still fierce, so what new opportunities and challenges will be encountered in the future LED chip market? Vice President of Huacan Optoelectronics, Bian Difei, will share with you the new cycle and new opportunities in the development of LED chip market at the closing ceremony of 2016 Gaogong LED Annual Meeting. Welcome everyone to attend the event.
From January 5th to 6th, Gaogong LED will strive to create the “2016 High-tech LED Annual Meeting·Golden Ball Awards Ceremony and the 10th Anniversary of Higher Industry and Research (2006-2016). This annual meeting will be re-convergence. Domestic and foreign business leaders, in-depth analysis of overall industry opportunities and risks, comprehensive outlook on technology, market, capital, pattern and other trends, and seek the "decisive victory" of China and the global LED lighting industry in the next three years.
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