LED prices will drop overcapacity Source policy support is not in place

Although LED was eventually included in the “Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries” together with new energy vehicles, biopharmaceuticals, photovoltaics, nuclear power, etc., compared to the rapid expansion of the pilot cities to 25 new energy sources. "In terms of automobiles, nuclear power generation, and high-profile biopharmaceuticals for superbugs and locusts," the market public opinion seems to be slightly inferior to Zeng Hung's LED.

Taking the “Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries” as an example, on September 8th, China’s LED leading stock Sanan Optoelectronics reported a slight drop of 0.04%, which is known for the concept of upstream resources such as new energy vehicles. Baotou Steel Rare-earth, vast and colorful colored have been sealed in the daily limit. Dongguan reported that the "LED chip prices nearly 30%" news, investors have significantly reduced the enthusiasm of the concept of LED, at the same time, even industry insiders pointed out: China's LED has become an overcapacity industry.

LED investment has soared, and big projects have never stopped hearing

The conclusion of overcapacity is not empty talk. According to public information, under the premise that the cost of LED lighting products is difficult to reach the popularization standard, some organizations predict that the output value of China's LED industry will exceed 150 billion yuan in 2010, and this figure is twice that of 2008. . More industry experts predict that this year's investment in the domestic LED industry will reach 60 billion yuan, an increase of 500% over last year's more than 100 billion yuan.

However, even if the industry has vigilantly released signals of overcapacity, such as "Xi'an High-tech Zone and Dongguan Qinshang Optoelectronics Co., Ltd. and Xi'an Jiayu Energy Technology Co., Ltd. sign a high-power LED optoelectronic industrial base project with a total investment of 680 million yuan," the general generous cooperation. Still inexhaustible, the LED investment boom that once occurred in the “Wuhan-China Optics Valley” (Wuhan National Hi-tech Industrial Development Zone) was copied over and over again throughout the country.

LED has been upgraded to a mature industry

After all, the LED industry investment that is so highly sought after benefits from: LED lighting products have outstanding advantages, complete industrial chain, China's silicon, sapphire and other LED upstream resources are rich, the industry access threshold is low.

It is understood that, first of all, taking a 40-watt LED lamp as an example, it is 90% more energy-efficient than an incandescent lamp and has a lifetime of up to 20,000 hours. It is more than four times longer than the incandescent lamp life (3000-5000 hours); at the same time, the LED is upstream and downstream. Subdivided "raw material purification - slicing - encapsulation - synthesis" in various sectors of the industry in China has been quite complete; In addition, as a raw material for the production of LED chips, China's silicon reserves are quite rich, through the artificial synthesis of quartz material - sapphire supply does not exist Vacancy; The most important thing is that the initial investment in the LED industry is only 100 million yuan, and the low threshold for industry access has encouraged the launch of projects in various regions.

It seems that, unlike PV, wind power and even new energy vehicles, which are difficult to break through the constraints of energy storage technologies, the development of LED-based electro-optic conversion technology for nearly 40 years is almost mature. In Wuhan Bono Lideng New Energy Technology Co., Ltd. According to Wang Baocheng, the chairman of the board, the only problem that has plagued the development of the LED industry is focused on prices.

LED is subject to price constraints and bottleneck breakthrough is only a matter of time

"Three years ago, 40-watt LED tubes were ex-factory prices of about 300 yuan, but most of the products are now priced between 140-160 yuan, and chip prices have basically maintained a 20%-30% decline every year, and the price On the basis of the downward adjustment, the products of the past 5-6 lumens have now been upgraded to 7 lumens (product quality improvement), and it can be said that the price of LED lighting products has fallen significantly,” Wang Baocheng introduced.

In spite of this, the price of incandescent lamps, the biggest competitor of LED lamps, is only RMB 20, which is nearly 8 times the price gap and seriously plagued the popularity of LED lamps. "It is unrealistic to reduce the cost of LED lamps to the same level as incandescent lamps, but according to industry practice, if the price of LED lamps is reduced to 40-60 yuan (3 times that of incandescent lamps), consumers can accept it. LED will also truly replace incandescent lamps. According to the current speed of development, LED will soon achieve this goal," Wang Baocheng firmly believes.

Overcapacity originated from inadequate policy support

It is understood that on the issue of excess LED capacity, Wang Baocheng said, "At present the domestic LED production capacity is indeed surplus, but the main problems in the industry are: the primary market investment is relatively concentrated in the last three links of the slice - package - synthesis, and the most upstream The purification of raw materials (silicon, sapphire) has been relatively neglected due to its large investment and difficulty in achieving scale."

The fact is also true, public information shows that in the industry chain, LED epitaxial wafers and LED chips account for about 70% of the industry's profits, LED applications account for about 10% -20%, LED packaging is less than 10%. The layout of China's LED companies happens to be the opposite: In more than 3,000 LED-related companies, LED packaging companies more than 1,000, LED application companies close to 2,000, LED epitaxy and chip companies, there are only 60.

What is more noteworthy is that “the energy-saving and emission reduction targets of local governments are not linked to urban lighting, so power-restricted production is only more concerned with industrial power consumption. However, if it is the other way, the policy is to constrain local governments through energy-saving and emission reduction targets. This will substantially increase the demand for the LED industry, effectively release LED production capacity, and at the same time accelerate the development of the industry, triggering a wave of LED market in the secondary market." Wang Baocheng believes that.