The LED industry has lost its brilliance? Can't rely on the government

On October 18, many people saw a huge airship "flying" flying over their heads in the ancient town of Zhongshan, Guangdong. The airship was painted with several huge blue characters: Wu Changjiang LED. NVC Lighting Holdings Co., Ltd. tried to attract people's attention by the name of Wu Changjiang, the founder of the company.

Wu Changjiang said at a related forum earlier this year that due to the maturity of LED technology and the decline in cost, the domestic LED era has arrived, and there will be an explosive growth period in the next three to five years.

However, at the groundbreaking ceremony of the Lights Plaza in the global lighting and lighting industry center held on this day, the reporter of the “First Financial Daily” saw that at least one-third of the seats in hundreds of seats were empty.

"This year's lighting business is very poor, with LED being the most bleak." A lighting company owner who participated in the ceremony told this reporter that their company's profit in the first half of this year was less than one-third of last year.

Lost brilliant LED

In the past few years, LED has made many people instantly become billionaires. However, in the past two years, a batch of small and medium-sized LED enterprises in Guangdong have closed down one after another. The Guzhen Town Government of Zhongshan City reported that a local billion-dollar Xiongji LED Lighting Factory (hereinafter referred to as "Xiong"), Xie Yingxiong, fled, suspected of contract fraud and refused to pay labor compensation.

Xiong Ji was once a model for the rapid expansion and prosperity of Zhongshan LED companies. In the interview, the reporter learned that after entering the LED industry, Xiongji’s business scale has grown by leaps and bounds. Xiongji’s output value last year was as high as 150 million yuan, while Xie Yingxiong invested less than 10,000 yuan.

But like Xiongji, the root cause of these enterprises' failures is the disorderly competition caused by the overcapacity. Yan Shukui, deputy secretary-general of the China Lighting Society, said to the reporter that the technology of the LED industry in Guangdong is not mature, the products are not mature, and they are blindly launched. When companies encounter difficulties, they compete with each other for vicious price competition.

A notable example is an industry insider who told reporters that some of the original products sold for $6 were sold for less than $4 before the closure.

Some business owners have admitted to reporters that the government's excessive preferential policies and financial subsidies have made companies dare to take risks and gain more wealth in a short period of time.

Guangdong Provincial Finance invested 450 million yuan each year to set up special funds for LED industry development during the 12th Five-Year Plan period. According to the “Implementation Plan for Promoting the Use of LED Lighting Products in Guangdong Province” issued in May 2012, Guangdong will take the lead in lighting projects in the public lighting sector, namely, roads, public places, government agencies, state-owned enterprises and institutions, etc. In the field, the application of LED lighting products is fully promoted.

The most deadly thing is that Yu Shukui said that the blind launch of LED companies and the mismatch of sales channels are the dilemmas of China's LED industry. Some companies lack sufficient understanding of LED products and do not know what LEDs are.

Under this circumstance, the Guangdong Provincial Institute of Standardization announced at the annual meeting of the Guangdong LED Lighting Standard Technology Alliance that the LED energy efficiency mandatory standard will be released and implemented in the near future. This standard is similar to the EU's August issue of the latest energy efficiency regulations for LED lighting products. It also specifies the two key indicators of performance and reliability.

The new standards are pressure and motivation for enterprises, and will force companies to improve the technology of LED lighting products. Some LED business owners in Zhongshan said that the new standard will increase the cost of the company by at least 20%. they said. Such strict technical standards may cause some companies with technical disadvantages to face bankruptcy.

Holding a group to warm

In the face of LED difficulties, many people began to call for industrial transformation and upgrading.

The lights are all viewed in this way: the urban upgrading promotes industrial upgrading. Yu Xibin, secretary of the party committee of Guzhen Town, said that in the process of industrial transformation and upgrading, the city will be upgraded through industrial upgrading, and then the whole industry will be further promoted through urban upgrading.

The town said that since the launch of Times Square in 2009, Guzhen family workshop-style husband and wife shop, former shop and back factory and other business sites have gradually been replaced, such as World Trade Plaza, Lighting Building, Yinquan Hotel, Oriental Yusheng Plaza and other high-end professional The store, the modern service package and the industrial modernization plant have been built one after another, which has made the Guzhen lighting industry enter a new business era, and also the framework of the urban construction of the ancient town.

According to the current plan, the global lighting and lighting industry complex of the ancient town with the light king as the core has six functions of sightseeing, global exhibition and trade city, ecological park, headquarters base, theme hotel and lighting museum. The total investment is 8.5 billion yuan.

"This is just a transformation and upgrading of the hardware, it is not an itching." An LED business owner who did not want to be named told this reporter, "The key to whether the LED industry can be brought back to life is whether we can have our own core technology. Standards that are consistent with products, rather than relying on government support."

Zhao Ming, deputy director and secretary general of the Energy Conservation Service Industry Committee of China Energy Conservation Association, said that in the past "Eleventh Five-Year Plan" period, the state's administrative means, financial means, including price means have been used to the extreme. The current outstanding problem lies in the new session. The government has reservations about policy incentives, so companies must rely on their own internal strength to obtain development.

Wu Changjiang said that the development of LED in the past few years is not solid, and the manufacturing technology of the company itself is not relevant, mainly based on government investment. He said that if enterprises want sustainable development, they must rely on the market and rely on continuous innovation of products, channels, management and industry.

Wu Changjiang confidently believes that after several years of development, LED technology has been basically mature and the cost has also declined. Therefore, NVC will increase investment in LED production in the future. Strive to achieve more than 50% of NVC's total sales.

In order to cope with the current winter encounter in the LED industry, including Wu Changjiang, Guangdong LED business owners rushed to Guangzhou from all over the country and around the world last month to organize an LED industry association, trying to warm up from the group.

As the various difficulties in the LED industry have intensified, Wu Changjiang has publicly stated that industry consolidation is only a matter of timing.

(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.)

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