As the saying goes, “In the Yangtze River, the waves behind drive on those before with the old waves vanishing on the shore.” This aptly describes the status of the domestic LED industrial investment. Since last year, many problems have cropped up in the LED industry such as “bankruptcy waves,” “the running-away bosses,” production halts, significant financial deficits and more; however, fresh forces keep coming forward to invest in LED projects. The current condition of domestic LED industrial investment can be described as half “iceberg” and half “flame.”
There has long been heated debate about the investment into LED lighting in the industry, which is manifested in the following aspects:
I. The increasing expanded investment scale. Recently, the domestic LED industrial investment has enjoyed a growing scale. According to relevant statistics, the total investment exceeded 30 billion Yuan in 2010 and over 40 billion Yuan in 2011(the planned investment in 2011 was more than 150 billion).
II. Traditional lighting enterprises switch to LED. Apart from the constant emergence of professional LED enterprises, traditional lighting enterprises are undergoing transformations involving LED businesses like Foshan Lighting, NVC Lighting, Feilo, Yankon and so on.
III. Other industries enter the LED field. Tycoons from other industries also think highly of the LED lighting industry and have begun to take actions, including BYD, Tsinghua Tongfang, IRICO Group, Changhong, China Electronics Technology Group Corporation, Zhongcai Group, etc.
IV. Going public: Presently in China, there are 17 companies with LED listed as the main business, over 10 relevant companies waiting for IPOs and 30+ companies listed with LED concepts.
V. Investment focus shifts from the upper reaches to the whole industrial chain. The vigorous subsidy of MOCVD by the government has led to overinvestment into epitaxial chips and sapphire substrates. However, alongside the overcapacity and constant launching of the lighting market, the investment trend witnesses some changes with the lower reaches, especially lighting applications as the focus, and a great many upstream companies begin to expand to the middle and lower reaches.
Problems such as overlapping investment, inefficient investment and investment structural surplus have been pervasive in the domestic LED market. As upstream chip requires more capital and higher technology, most domestic companies are reduced to middle and lower package and application, with small business scales, backward technology and subpar quality, and not a few enterprises just want to fish in the troubled waters to make a big profit, which severely affects the healthy development of the market. In the long run, the seemingly prosperous LED investment bubbles will fade, leaving many companies stranded on the beach.
If we look at the previous development of LED, we will find that strong government support plays an enormous role into LED investment. The “achievements show of ten pilot cities” introduced by the Ministry of Science and Technology lights up the road of LED ahead. However, with the 2.2 billion Yuan subsidy for lighting products granted by the State Council put into practice, the implementation of the Twelfth-year Plan for LED lighting, the launching of public lighting renewal projects in Guangzhou, and the promotion of the bidding for LED lighting products subsidy issued by the three ministries of China (namely, the Ministry of Finance, the Propaganda Department of the Central Committee of the CPC and the Ministry of Education), the huge market is being scrambled upon by tycoons from different fields. The global LED lighting permeability will increase to 50% in 2015. What is more, the replacement campaign of traditional incandescent lamps all over the world will undoubtedly bring a huge surrogate market, which means another round of temptation to the investors.
What is the direction for LED industry investment in the future? How should the investors properly evaluate the investment risks facing the hot and cold of the LED industry? What potential dangers will crop up behind the prosperity of the LED industry? How to avoid investment risks? How to guide the overheated LED industry investment back to the rational side? Are there more opportunities or traps for investing in LED industry? What do you think of the current investing and financing of LED industry?
CHINASSL2012, which will take place between November 5 and 7, 2012 in Guangzhou, China, will present an exchange platform for all relevant companies to showcase themselves. In “China’s LED Industry Investing and Financing Summit,” a numerous insiders will discuss in-depth the issue of LED investing and financing, which will provide an all-around platform for deep dialogue.
CHINASSL2012 is the largest forum in the field of semiconductor lighting with the best participation and prestige. It features a comprehensive range of innovative LED manufacturing equipment, materials, technology, products and applications, provides an international cooperation platform for the whole industrial chain, is devoted to expanding the targeted market of the most concern in the industry, and creates commercial value for enterprises with professionalism.
CHINASSL2012 has two conferences and nearly 20 seminars. Discussions and exchanges will be conducted through various manners such as conferences, technological meetings, theme meetings, overseas special shows and technological training, which serve as a bridge to benefit the attendees. Meanwhile, Business Matching, Japan Room Meeting, POSTER Exchange, the Voice of Executives, etc. will be arranged, which offer more opportunities for exchange. Additionally, the unique booth exhibitions of companies both from home and abroad that spans over 10,000 sqm will attract all parties in the business circle to activate the transaction chain and supply chain together.
To better meet the pattern transformation and market demand of the 2012 domestic LED industry, and guide the virtuous competition between the upper, middle and lower reaches of the industrial chain and their domestic and international counterparts, the organizer has elaborately planned the overall arrangement of this exhibition. The “Innovative Lighting Design Gallery” will launch for the first time, gathering various brands of LED lighting application ends to issue featured products and future trends in the field of commercial lighting, including Megaman, Samsung and more. The “Innovative Lighting Design Gallery”, as a unique demonstration platform for commercial lighting products, is set up from the perspective of lighting design and will create different lighting effects in various commercial environments with LED lighting sources as the creativity elements, making visitors personally feel involved. As the leading exhibition organizer in the world, Reed Exhibitions will unite with cross-industry exhibition resources and share abundant buyers’ databases to invite quality buyers from lighting design engineering companies, hotels, commercial real estate development groups and department stores to the show for visiting and purchasing.
（Author: Cheng Xiaohui）
China Solid State Lighting Alliance (CSA), which consists of leading Chinese LED enterprises and a research institute, was founded in 2004 under the support of Governing Committee for China Solid State Lighting. CSA aims to promote technological advancement and commercialization of SSL, accelerate development and establishment of standards, evaluation and quality testing methodology, establish an information service platform for SSL industry, enhance regional and international cooperation, establish communication access between government and industry, and facilitate individual development and integration of discrete resources to improve the global competitiveness of the China SSL industry.
Reed Exhibitions is the world’s leading events organizer, with more than 460 events in 36 countries. In 2010, Reed brought together over seven million event participants from around the world, generating billions of dollars in business. Today Reed events, organized by 34 fully staffed offices, are held throughout the Americas, Europe, the Middle East and Asia-Pacific. Reed organizes a wide range of events, including trade and consumer exhibitions, conferences and meetings. Its portfolio of more than 460 events serves 44 industry sectors. For more information, visit www.reedexpo.com.
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