The 13th Five-Year Development Plan Drives China's Lighting Industry into a New Era

Date Released: August 3, 2017 Source: China Security Exhibition Network Share:

On July 28, 13 ministries and commissions including the National Development and Reform Commission jointly released the "13th Five-Year Development Plan for Semiconductor Lighting Industry" (hereinafter referred to as the "Plan"). The Plan aims to guide the development of China’s semiconductor lighting industry, foster new economic momentum, and promote energy-efficient lighting.

According to the plan, by 2020, China’s semiconductor lighting industry will continue to make breakthroughs in key technologies, improve product quality, optimize product structures, steadily expand industrial scale, and increase industrial concentration. It aims to form more than one LED lighting enterprise with sales exceeding 10 billion yuan. It will also cultivate 1 to 2 internationally renowned brands and around 10 domestically well-known brands. Additionally, it will promote the application of OLED lighting products to a certain scale, broaden application fields, standardize the market environment, and lay a solid foundation for China to transition from a major semiconductor lighting country to a strong one.

As early as 2012, the LED lighting sector entered a golden period of development. Due to the low technical barriers, a flood of capital poured in, and many companies entered the field from different industries. This led to a booming market, but also indirectly triggered price wars and product homogenization. By 2015, the overall growth rate of the LED lighting market dropped significantly. Many listed companies reported plummeting revenues and profits. During this period, numerous small and medium-sized enterprises without sufficient capital support vanished in this fierce competition. According to incomplete statistics, nearly 4,000 small and medium-sized enterprises in China’s LED industry collapsed in 2015 alone.

In 2016, particularly in the second half of 2016, rising prices and environmental regulations sweeping the entire lighting industry forced companies to reevaluate their strategies. It’s undeniable that the LED industry, as one of China’s 11 emerging industries, has demonstrated robust vitality under governmental support. On March 20, 2012, the Ministry of Finance, the National Development and Reform Commission, and the Ministry of Science and Technology jointly organized a public tender for the 2012 financial subsidy promotion project for semiconductor lighting products, providing subsidies for the first time to promote LED products.

Since 2012, as LEDs gained increasing attention from the government, many LED companies have received varying levels of relevant subsidies annually. According to Guzhen Lighting News, Sanan Optoelectronics, as a recipient of LED industry subsidies, has received 2.5 billion yuan in subsidies over the past five years. These subsidies primarily came from MOCVD equipment subsidies and special funds for technology research and development. Companies like Da, Huacan Optoelectronics, Aoyang Shunchang, Zhengtai Electric, Zhaochi, Sunlight, Liard, Feile, and Op Lighting have also become key beneficiaries of government subsidies, receiving over 100 million yuan each. Other companies such as Mulinsen, Hongli Zhihui, Changfang Group, Wanrun Technology, Maoshuo Power, Lianchuang Optoelectronics, Zhouming Technology, Weiwei, and Foshan Lighting have also received tens of millions of yuan in subsidies over the past five years.

It is clear that government subsidies have become a significant part of the annual profits for many enterprises. These subsidies enable some firms to have more capital to pursue mergers and acquisitions, expand production, and seek new profit growth points, thereby enhancing their competitiveness. However, this reliance on subsidies has also led some companies to maintain their performance by depending on such assistance.

Additionally, preferential policies from local governments have led to the concentration of industries. For instance, last March, the Standing Committee of the Nanchang Municipal Government approved the "Several Policies on Building Nanchang Optics Valley and Promoting the Development of the LED Industry." The new policy emphasizes the development and application of silicon-based LED technology. It aims to promote large-scale development while improving the industrial chain, expanding industry scale, fostering industrial clusters, and building Nanchang Optical Valley. The goal is to achieve an industrial scale of 50 billion yuan by 2020. To achieve this, the Nanchang government will provide support in areas such as land and capital to attract optoelectronic enterprises to settle in. Under government guidance, China has established several LED industry clusters in cities like Nanchang, Xiamen, and Yiwu, further concentrating the LED industry chain.

Following the issuance of the "13th Five-Year Development Plan for Semiconductor Lighting Industry," the development of China’s LED industry will become more standardized and sustainable. In the future, the country will aim to produce leading benchmark companies in the industry, targeting internationally renowned brands. Although China’s LED industry has seen the emergence of知名企业如三安光电、欧普照明、木林森等，与国际巨头如飞利浦、欧司朗、GE Lighting相比，仍有较大差距.

According to the 2016 LED Top 100 Companies list released by the Grand Lighting platform, the NVC Group, which ranks first, has only about 8 billion yuan in revenue, equivalent to just one-quarter of OSRAM's revenue. Thus, Chinese LED companies are not yet on par with international giants in terms of performance. The plan mentions the formation of more than one LED lighting company with sales exceeding 10 billion yuan. From the current perspective, NVC Group, Feilo Acoustics, Sanan Optoelectronics, Mulinsen, and Op Lighting appear to be the most promising LED lighting companies for achieving such a breakthrough in terms of total revenue and growth rate.

Meanwhile, the plan also proposes cultivating 1 to 2 internationally renowned brands. From this standpoint, the globalization of China’s LED companies will become more normalized. In recent years, Chinese LED companies have been keen on acquiring high-quality foreign brands. For example, Feilo Acoustics' full control of Xi Wannian after two years, Mulinsen's acquisition of Osram's general lighting business, and Konka Group's 1 billion yuan acquisition of Toshiba's lighting business in China all indicate that the global lighting landscape is undergoing a revolution, with global LEDs increasingly becoming Chinese.

Under the guidance of national policy planning, the overseas branding efforts of China’s LED companies will accelerate, whether through acquiring overseas famous brands or building overseas channels, entering a new development cycle.

Additionally, the plan mentions promoting OLED lighting products to achieve a certain scale of application. As the saying goes, good wine needs no bush. OLED lighting boasts advantages such as lightness, flexibility, low power consumption, transparency, etc., making it highly favored in many fields and leading the fourth wave of the lighting revolution. As the next-generation mainstream lighting technology, OLED has many advantages. With the continuous advancement of OLED technology and improvements in production capacity, its application fields are bound to expand significantly, and the OLED industry will also迎来新的布局.

According to IDTechEx, OLED lighting panels will reach a market size of more than $1.8 billion by 2025. This is due to OLED lighting’s key disruptive technology characteristics: if evaluated by industry quality factors such as lm/W and $/klm, OLED lighting technology doesn’t perform as expected, and the price is too high; but it can create new markets focusing on innovative FOMs, such as large-area launches, lightweight and flexible designs. IDTechEx believes that OLED lighting can use these differentiation factors to develop a range of niche markets and leverage its accumulated industry experience to make progress in existing areas.

Furthermore, the plan proposes supporting fundamental and common key technology research for semiconductor lighting through national science and technology plans (special projects, funds, etc.). It also aims to accelerate the development of key technologies such as materials, device preparation, and system integration, and conduct research on key technologies common to OLED lighting material design, device structure, and preparation processes. Through industrial transformation and upgrading funds and industrialization demonstration projects, it will vigorously promote silicon-based LED technology and product applications with independent intellectual property rights. The guiding products will be improved by focusing on enhancing light efficiency and various photoelectric indicators, improving the light quality and comfort of LED products, and creating a safer, more comfortable, more efficient, and energy-saving lighting environment. Automation of LED lighting product production equipment will be strengthened to improve product production efficiency and quality. Smart lighting and emerging application technologies will be promoted through integrated technology and application demonstrations.

Key technologies such as materials, device preparation, and system integration remain weak points for domestic LED lighting companies. Only by mastering core technologies can they truly take control. In the past, patent issues surfaced, such as Philips Lighting Group suing Chinese lighting companies and the ongoing patent disputes between Yiguang and Nichia, exposing the lack of core technology in China’s LED industry.

Previously, the rise of China’s LED lighting industry heavily relied on China’s traditional manufacturing advantages—cheap labor costs and convenient supply chains—that made Chinese enterprises the main force in the lighting industry. However, as China’s manufacturing advantages narrow and foreign gaps persist, China’s lighting industry must achieve qualitative breakthroughs by focusing on core technologies.

Simultaneously, with the emergence of emerging concepts and technologies such as the Internet of Things and 5G, smart lighting will become a new competitive point in the future. Both domestic and international lighting companies are actively investing in this field. At this stage, core technology is no longer limited to materials and device preparation but now includes control technology and system integration as new requirements.

Currently, the country is promoting the transformation and upgrading of traditional enterprises. LED lighting companies not only need to innovate technologically but also integrate automation deeply in the future to improve product production efficiency and quality to adapt to emerging applications such as smart lighting.

Label: "13th Five-Year Development Plan" drives China's lighting industry into a new era

Optical Prisms

Specification

Optical Prism,Right Angle Prism, Roof Prism,Glass Prism,Triangular Prism

Changchun Realpoo Photoelectric Co., Ltd. , https://www.optics-realpoo.com