Analysis on the Current Situation and Trend of LED Lighting Market
LED industry with efficient environmental protection and other characteristics, the initial development is to rely on external forces to promote the government policy to promote the dramatic expansion of production capacity, competition continues to intensify, gross margin decline accelerated. With the reduction of policy subsidies, profit model will shift from government subsidies to market, the future industry consolidation will accelerate.
The upstream link is the capital technology-driven, the highest degree of concentration. Downstream lighting recent rapid development, a lot of new entrants, through the low price for the market, the lighting standards are not established, product quality uneven, the future with the consumer concept of maturity, will be the brand decision value.
A few years ago, as the industry generally optimistic about the LED market prospects, resulting in capacity expansion is much faster than the growth rate of demand, resulting in continued decline in gross margin. Over the past year, LED prices have been reduced to a reasonable level (with the traditional energy-saving lamps difference), with the outbreak of demand, the future decline in space is not large, gross margin has been close to the lower limit, chip link margins have rebounded, follow-up space Limited, industry leading enterprises will obviously benefit.
With the increasing number of LED enterprises, enterprises with capital advantages through the establishment of branch offices (subsidiaries), mergers and acquisitions, strategic alliance in three ways to achieve vertical integration of industry.
For the upstream chip companies, their own high technical barriers, through the capital advantage, can quickly penetrate downstream Upstream chip manufacturers, more through the acquisition, self-built company to achieve the way to the packaging, application of the expansion.
For the middle of the packaging business, technical barriers are low, generally easier to expand to the downstream lighting business. LED industry early, Taiwan packaging manufacturers through mergers and acquisitions cut into the way to the upstream chip. The current environment, this way through the merger and acquisition more and more difficult, capital enterprises are usually through self-built way to achieve upstream infiltration.
For the downstream application enterprises, in the "smile curve" at both ends, enjoy high profit margins, generally not to the low profit package expansion, more through the "strategic alliance" to high profit margins "chip" link expansion.