LED is a very hot investment industry in the past few years.
From landscape lighting, backlight, to display applications, LED engineering is everywhere.
Investors predict that LED's next chance of large-scale popularization will be to enter the huge market of home lighting, which also brings infinite imagination to the development prospect of the industry.
However, this industry is currently facing various severe tests: lack of core technologies, small and medium-sized enterprises, vicious competition, overcapacity, and so on.
So how can we reverse this situation? If the LED industry wants to succeed, what adjustments do enterprises and governments need to make?
In recent years, China's LED industry has begun to face the pain of transformation and upgrading.
Recently, Li Jun, an insider in the industry, said at the middle-age investment conference that most Chinese LED enterprises do not have core technologies, so they are concentrated in the downstream lamp production, in addition, it mainly relies on government subsidies and engineering projects to eat, so it is easy to rush, resulting in overcapacity and vicious competition.
In the LED industry chain, there are at least five thousand enterprises in the link of making light bulbs. This cannot be said to be the Red Sea, but it is also a place that basically cannot enter.
Further upstream, there are more than one thousand packaging companies, which are also very crowded.
If you go up to make epitaxial wafers, this place is a little smaller, more than 50, and now it may exceed this number.
Investors on the forum said that an important reason for the overcapacity in the industry is that because downstream production does not require patented technology, the threshold is low, and there is a situation in which there is a lot of porridge.
However, a different point of view will be drawn from another angle.
Yu Lifeng, a partner of Jiyuan Capital, believes that the current LED overcapacity is a false proposition. Once the real market demand is excavated in the future, the future of the industry is immeasurable.
The market demand is empty. It does not go into the real product and becomes an energy-saving product, but an engineering company.
Now looking at most, even some LED listed companies, I think it is not accurate to position it as an energy-saving product company, it should be defined as an engineering company.
So I think the future space in this field is huge, including many other lighting tools that we all said just now will be eliminated in the future, including incandescent lamps, the future is expressly prohibited by law.
In the eyes of investors, one of the core problems of China's LED industry is that enterprises do not really go deep into the consumer market.
Therefore, in order to release the future development space of LED, on the one hand, it depends on the survival of the fittest in the market, and at the same time, it needs to transform from an engineering company to a product company, and master independent technology and improve competitiveness in the process.
However, in an environment where policies tend to support large enterprises, SMEs are in a dangerous situation.
Because the state subsidizes, of course, we must subsidize our own enterprises with intellectual property rights.
There is also the terminal. The state subsidies are for large enterprises, so there is a list. I have seen that only large enterprises can be taken care of. Many small enterprises will definitely die in the future.
It is not wrong for the government to support emerging industries with subsidies. But to supply large companies or small companies?
Is it the technical link in the front section or the demand link in the back end?
Nie Peijia, CEO of Lejian Technology, believes that the current subsidy method for LED industry in China is not conducive to the healthy development of the industry. Subsidizing the front-end production links will only stimulate the continuous expansion of the industry, there is finally a situation of overcapacity.
I think government subsidies should be in demand, tax rebates and so on. For example, the EU government and the US government are the same. For example, a light bulb costs 10 US dollars. In fact, ordinary consumers can buy it for 6 US dollars, because there are tax rebates and other measures.
For our small and medium-sized enterprises, we will never enjoy this kind of investment that is only at the forefront. This kind of investment activity actually has no guarantee for the quality of products and projects.
Similar experiences and lessons exist not only in LED industry, but also in industries such as photovoltaic and electric vehicles.
Policy subsidies have a way to truly create demand and promote the development of the industry.
At the same time, only by improving the quality of their own products through technological innovation can enterprises truly establish themselves in the market competition.