Analysis: LED foundry enterprise crisis and machine

At the beginning of the reform and opening up, our country with low labor costs and favourable conditions of investment promotion and capital introduction, as Europe and the United States, Japan and South Korea and other economies shift low-end industrial chain processing manufacturing best destination. LED industry also is such, through developing foreign-oriented contract economy, form the pearl river delta, Yangtze river delta, fujian triangle multiple LED industry area in the coastal area.

at present, the contract is still one of the main mode of development of LED industry in China. As the LED product price decline, the market competition, brand enterprise compression cost, domestic demographic dividend has disappeared, the rising cost of raw materials, the development of foundry enterprise is restricted. In the face of the changing economic environment, LED foundry enterprises should actively strategic transformation, otherwise will be eliminated by the market.

danger of foundry and machine LED OEM mode mainly materials processing, OEM, ODM three modes. OEM is original equipment manufacturing, commonly known as stick a card; Is on the basis of OEM, ODM engaged in or participate in product development and design. At present, the domestic LED industry OEM is given priority to with OEM. Relevant data show that China's export LED products ratio above 80%.

contract can help brands and manufacturers to achieve win-win cooperation, brand, technical superiority and cost control, combining the advantage of cheap labor. Contract become traditional lighting enterprise transformation LED lighting, LED most domestic enterprises to participate in one of the main methods of global competition. Leishi lighting, foshan lighting, traditional lighting companies such as initial stage are beautiful unanimously adopted the OEM mode into LED lighting field, for these channels to win the traditional lighting companies, the biggest advantage is not the kind of production.

in March 2010, Abby's established lighting division, made clear its global LED lighting professional OEM/ODM integrated service providers of positioning, choose to make lighting career as an important foundation.

'focus to do OEM business, the domestic many small and medium enterprises mainly are under pressure to survive. OEM orders are stable, cycle short, cod, there is no too much money and inventory pressure. Contract only need to focus on research and development and production field, do brands need huge upfront costs, high profit and risk. 'A senior industry insiders said.

influenced by energy conservation and emission reduction policy, global LED end products demand is rising sharply. International lighting giants, domestic brand LED manufacturers and cross-border business, into the field of LED lighting, expanding grab market capacity, this provides OEM more development opportunities.

contract to become an effective way to quickly grab market brand operators. With solid capital strength, strong brand influence, the advanced technology development and market operation experience of brand operators, through the contract to integrate product advantage, but in a short period of time to achieve maximum capacity and product diversification. Such as philips, osram and GE's most products are produced by the contract, Shanghai yaming, sunlight, lighting, lighting, fly China li bit has been OEM for philips lighting energy-saving lamp series products.

as a 'smiling curve' on the lowest value-added manufacturing, the human cost difference is mainly foundry enterprise profit, because the customer will be in accordance with the high human cost paid to foundry enterprise. But as the domestic labor costs, rising raw material costs, demographic dividend gradually disappear, LED foundry enterprises can only depend on the amount remain profitable.

the world's most influential foxconn OEM factory, the most good at the mass production, labor cost and material cost control, now began to transition, go the way of independent brands and the method of machine production. Thus, small and medium sized foundry enterprises situation more difficult. One industry source said, 'before the processing for the big brands, profit return calculate can, however, as the price competition is increasingly fierce, the brand company will have to lower prices cannot be further lowered, the profit is more and more thin, a bit inadvertent, will be at a loss. '

the chun-ming xu, vice President of the Shanghai university college of intellectual property rights, said professor in foundry enterprises must transform, because the contract revenue model is the low Labour cost, but in the past two years, labor costs in China - 10% each year 20% of the increase in China, the extrusion LED foundry industry profits space. Our LED enterprises to drive to the innovation drive transition from realization cost, take the path of independent brands.

OEM and own-brand parallel

in the LED industry, aggregate chip packaging field in technology and innovation as the main driving force; And in the downstream of the lighting applications, brands and channels are often the core competitiveness of the enterprise. As neither technology nor the brand and channel LED foundry enterprise, only by a small processing profit strives for the survival, this is not conducive to the long-term development of the enterprise.

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