"In the entire LED industry chain, the upstream areas such as epitaxy and chips accounted for 70% of the profits." On July 7, Zhang Xiaofei, CEO of Gaogong Online and director of the LED Industry Research Center, told the reporter.
Regrettably, this "70% profit" has nothing to do with most of China's LED companies. The current situation of China's LED industry is still that most enterprises are concentrated in the middle and lower reaches of the industrial chain such as packaging and application. The foreign LED giants have taken most of the profits by virtue of the upstream core technology advantages, and domestic enterprises can only compete for the remaining cakes.
Large number of countries and small technology countries
On the scale of industry, China has undoubtedly become a big LED country. According to statistics, in 2010 China's LED sales value will exceed 150 billion yuan, this figure is twice as much as in 2008, and continue to grow at a rate of 30% per year. According to the reporter, only one province in Guangdong is expected to reach 120 billion yuan in 2012 and 30 billion yuan by 2015. China's LED full color screen, LED traffic lights, solar LED lights and LED landscape lighting production are ranked first in the world.
Although China's LED products have an advantage in terms of quantity, they are still subject to high-end technology. At present, the core technology of global patents is mainly in the hands of giants such as Japan's Nichia, Cree, and Osram. At the same time, in the field of epitaxial wafers and chips, American and Japanese companies are also in a monopoly advantage. In this fierce competition, among the thousands of LED companies in China, there are only a few dozen companies involved in epitaxy and chips. There are only a handful of companies that can grow bigger.
According to LEDinside statistics of the LED industry research institute, as of August 2009, there are only 62 existing LED chip manufacturers in mainland China, and there are not many enterprises that actually mass-produce. Enterprises are also mainly concentrated in the low-end, low-end areas. In the high-power field, there are few companies involved in many technical and technological problems. Zhang Xiaofei told reporters that due to the large upstream investment, the requirements for technology, talents and patents are relatively high. At present, only a few enterprises in China have such capabilities.
In the entire LED industry chain, epitaxy and chips account for 70% of profits, which means that only 30% of the downstream profits, more than 90% of China's LED companies in this 30% of the profits to compete for the market.
The dilemma of patents and technology
"Upstream does not lose money is not bad," Professor Wen Shangsheng, director of the Semiconductor Lighting Technology Research Center of South China University of Technology, told the "Daily Economic News" reporter, China's LED upstream enterprises, especially the extension enterprises, can be quite good.
Wen Shangsheng once revealed that a company invested heavily in the LED extension field, but the final result was forced to stop production, and production equipment was donated to a university in Guangzhou. Because of the factors such as immature technology, he also advised business owners not to easily get involved in upstream areas such as LED extension.
Domestic companies can only protect themselves from the upstream and rely on luck, behind the shadow of the lack of patents and technology.
According to Wen Shangsheng, China has not mastered the key technologies in the upstream field of LED. The quality and performance of products are far from the foreign products. Under the strong attack of foreign companies, the living space of local enterprises has become very small. No one wants the product."
In terms of patents, Lin Xiaoning, deputy general manager of Jingke Electronics (Guangzhou) Co., Ltd. also expressed his worries. He told reporters that foreign LED companies have mastered more patents, and foreign markets are therefore in a monopoly state. It is difficult for local companies to go abroad. Even in many domestic bidding, it is more favored for foreign chips.
Under the multiple effects of these factors, domestic LED companies can only focus on downstream areas such as LED lamps and lanterns with relatively mature technologies and products, and share the surplus, while the more profitable upstream areas can only be handed over to foreign companies.
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