The 13th Five-Year Development Plan Advances 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 released a notice titled the “13th Five-Year Development Plan for Semiconductor Lighting Industry†(hereinafter referred to as “the Planâ€). This plan aims to guide the development of China’s semiconductor lighting industry, foster new economic momentum, and promote energy-efficient lighting solutions.
According to the plan, by 2020, China’s semiconductor lighting industry is expected to see continued breakthroughs in key technologies, improved product quality, optimized product structures, steady expansion of industrial scale, and gradual increases in industrial concentration. More than one LED lighting enterprise with sales exceeding 10 billion yuan should emerge. The plan also aims to cultivate 1-2 internationally renowned brands and approximately 10 domestically well-known brands. Additionally, it seeks to promote the application of OLED lighting products to a certain scale, broaden application fields, and standardize the market environment, laying a solid foundation for transforming China from a major player in the semiconductor lighting industry to a global leader.
As early as 2012, the LED lighting sector entered its golden age of development. Due to the relatively low barrier to entry in LED lighting technology, a flood of capital flowed into the market, and many companies jumped into the field. This led to a booming LED lighting market; however, it also indirectly sparked price wars and product homogenization. In 2015, the LED lighting market faced significant challenges, with overall growth rates dropping sharply. Many listed companies saw their revenues and net profits plummet. During this period, numerous small and medium-sized enterprises without sufficient capital backing vanished in the fierce competition. Incomplete statistics suggest that nearly 4,000 small and medium-sized enterprises in China's LED industry collapsed in 2015.
In 2016, particularly in the second half of the year, rising prices and stringent environmental regulations reshaped the entire lighting industry. Companies had to adapt quickly to survive. The LED industry, as one of China’s 11 emerging industries, has demonstrated remarkable vitality under state 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 financial subsidy promotion project for semiconductor lighting products, conducting domestic public bidding and providing subsidies for the first time to promote LED products.
Since 2012, as the government has increasingly focused on LEDs, numerous LED companies have received various levels of government subsidies annually. According to Guzhen Lighting News, Sanan Optoelectronics, as a recipient of LED industry subsidies, has received 2.5 billion yuan in government support over the past five years. The subsidies primarily came from MOCVD equipment subsidies and special funds for technology research and development. Similarly, Da, Huacan Optoelectronics, Aoyang Shunchang, Zhengtai Electric, Zhaochi, Sunlight, Liard, Feile, and Op Lighting have also been among the key beneficiaries of government subsidies, receiving amounts exceeding 100 million yuan. Additionally, subsidies have been provided to companies like Mulinsen, Hongli Zhihui, Changfang Group, Wanrun Technology, Maoshuo Power, Lianchuang Optoelectronics, Zhouming Technology, Weiwei, and Foshan Lighting, with tens of millions in support over the past five years.
Government subsidies have become a crucial component of many companies’ annual profits. These subsidies have allowed some firms to amass additional capital for mergers and acquisitions, production expansion, and exploring new profit streams, thereby enhancing their competitive edge. However, this reliance on subsidies has inevitably led some companies to depend on them to sustain their performance.
Moreover, preferential policies from local governments have contributed to the clustering 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 on a large scale. It also aims to improve the industrial chain, expand industry scale, create industrial clusters, and establish Nanchang as an Optical Valley with an industrial scale goal of 50 billion yuan by 2020. To achieve this, the Nanchang government will provide various forms of support, including land and capital incentives, to attract optoelectronic enterprises to settle in. Under the guidance of the government, 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,†China’s LED industry will develop in a more standardized and sustainable manner. In the future, the country will aim to produce leading benchmark companies within the industry, positioning them as globally recognized brands. Although China’s LED industry chain has seen the emergence of知åä¼ä¸š such as Sanan Optoelectronics, Op Lighting, NVC Lighting, Guoxing Optoelectronics, Dehao Runda, Foshan Lighting, Mulinsen, etc., there remains a significant gap compared to larger foreign companies like Philips, Osram, and GE Lighting.
Based on the 2016 ranking of the top 100 LED companies by the Grand Lighting platform, NVC Group, which ranked first, reported revenue of approximately 8 billion yuan, equivalent to only one-quarter of OSRAM’s revenue. Thus, China’s 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. Currently, NVC Group, Feile Audio, Sanan Optoelectronics, Mulinsen, and Op Lighting appear to be the most promising LED lighting companies in terms of total revenue and growth potential.
Simultaneously, the plan proposes cultivating 1-2 internationally renowned brands. From this perspective, the issue of Chinese LED companies expanding globally will become more routine. Over the past two years, Chinese LED companies have shown a strong interest in acquiring high-quality foreign brands. For example, Fei Le Audio’s full acquisition of Xi Wannian, Mulinsen’s purchase of Osram’s general lighting business, and Konka Group’s 1 billion yuan acquisition of Toshiba’s lighting business in China indicate that the global lighting landscape is undergoing a revolutionary shift, with global LEDs becoming increasingly Chinese.
Under the guidance of national policy planning, the overseas branding efforts of China’s LED companies will accelerate. Whether through acquiring foreign brands or building overseas distribution channels, Chinese LED companies will enter a new development cycle.
Additionally, the plan highlights the promotion of 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, and transparency, making it highly favored in many fields and leading the way for the fourth wave of lighting revolutions. As a new-generation mainstream lighting technology, OLED offers numerous advantages. With continuous advancements in OLED technology and production capacity, its application scope is bound to expand significantly, and the OLED industry will experience a new phase of development.
According to IDTechEx, OLED lighting panels will reach a market size of over $1.8 billion by 2025. This is due to OLED lighting’s key disruptive technology characteristics: while its industry quality factor (FOM), such as lm/W and $/klm, may not meet expectations, and its price remains high, it can create new markets focusing on innovative FOMs like large-area launches, lightweight, and flexibility. IDTechEx believes that OLED lighting can leverage these differentiation factors to explore niche markets and use its accumulated industry experience to advance in existing areas.
Furthermore, the plan emphasizes supporting fundamental and common key technologies in semiconductor lighting through national science and technology programs (special projects, funds, etc.). It also calls for accelerating research and development of critical technologies such as materials, device preparation, and system integration. This includes researching key OLED lighting technologies like material design, device structure, and preparation processes to facilitate industrialization. Through industrial transformation and upgrading funds and industrialization demonstration projects, efforts will focus on promoting silicon-based LED technology and product applications with independent intellectual property rights. The guiding products will be improved by enhancing light efficiency and various photoelectric indicators, improving product light quality and comfort, and creating safer, more efficient, and energy-saving lighting environments. Automation in LED lighting product production will be strengthened to improve production efficiency and quality. Smart lighting and emerging applications will also be promoted through technology integration and application demonstrations.
Materials, device preparation, and system integration remain weak points for domestic LED lighting companies. Only by mastering core technologies can they truly gain the upper hand. In the past, patent disputes, such as those between Philips Lighting Group and Chinese lighting companies, and between Yiguang and Nichia, highlighted the lack of core technology in China’s LED industry.
Traditionally, China’s LED lighting industry relied heavily on China’s manufacturing advantages—cheap labor costs and convenient industrial supply chains—making Chinese enterprises the dominant force in the lighting industry. However, as China’s manufacturing advantages narrow and foreign gaps widen, achieving qualitative breakthroughs requires a focus on core technologies.
Meanwhile, emerging concepts and technologies like the Internet of Things (IoT) and 5G are driving smart lighting to become a key competitive area in the future. Both domestic and international lighting companies are actively entering this field. At this stage, core technologies are no longer limited to materials and device preparation; control technology and system integration have become essential requirements.
Currently, the country is promoting the transformation and upgrading of traditional enterprises. LED lighting companies must not only engage in technological innovation but also deepen automation in the future to improve production efficiency and quality, adapting to emerging applications like smart lighting.
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