LED industry high prosperity will continue

At the beginning of 2013, due to the explosion of demand for downstream lighting and backlight, the entire industrial chain of LED industry continued to enjoy high prosperity. According to the statistics of DisplaySearch, the permeability of NB backlight was only 16 in 2008, and increased to 89 in 2010; In 2010, the backlight penetration of large-size TV began, and only about 10 of could not penetrate, from 2010 to 2011, from to, and from. Starting from 2013, with the double promotion of policy and price reduction, the lighting penetration rate has increased rapidly from 10, the prosperity has been continuously upward, and the lighting market of hundreds of millions will gradually open. Explore the emergence of inflection points in LED lighting demand, the results of the integration of policy assistance and price marketization. The government's promotion of the white ban policy and the government's procurement of LED street lamps have taken the lead in promoting the development of the entire LED lighting. Technological progress and commercial innovation have reduced the price of LED lighting, giving consumers the motivation and ability to consume. At the beginning of the period, the government promoted the development of LED outdoor lighting through municipal procurement. In the future, the government will stimulate the development of civil lighting through terminal consumption subsidies. With technological progress and commercial innovation, the price of LED bulb lamps continues to decline. At present, the market price of LED bulb lamps is 0-higher than that of energy-saving lamps- 15. As LED lamps are more efficient, energy-saving and environmentally friendly, the penetration rate will continue to increase. In the future, outdoor lighting will continue to grow under large-scale government bidding. Commercial lighting is booming at present. Hundreds of millions of markets in the future will still be consumer terminals. With technological progress and product design concept improvement, the price of LED lighting products will drop sharply, and the penetration rate of indoor LED lighting in mainland China will increase explosively in the next 2 years. At present, grassroots research results show that LED lighting manufacturers are working overtime to catch up with orders, traditional energy-saving lamp dealers are distributing goods in large areas, the penetration rate of LED lamps in sales channels is as high as 90, and civil lighting is ready to go. The LED industry has the characteristics of high efficiency and environmental protection. In the early stage of development, it was promoted by external forces. Government policies promoted the rapid expansion of production capacity, intensified competition, and accelerated the decline in gross profit margin, the general decline in gross profit margin of LED listed companies in the third quarter also confirms this point. With the reduction of policy subsidies, the profit model will shift from government subsidies to marketization, and industry integration will accelerate in the future. The upstream link is driven by capital technology and has a high degree of concentration. Downstream lighting is developing rapidly, and there are many new entrants. The lighting standards have not been established and the product quality is uneven. In the future, with the maturity of consumer consumption concept, Brand will determine value. In the past few years, as the industry is generally optimistic about the prospects of the LED market, the expansion rate of production capacity is much faster than the growth rate of demand, so the gross profit margin continues to decline. In the past year, LED prices have fallen to a reasonable level (Not much difference with traditional energy-saving lamps) With the outbreak of demand, there is little room for decline in the future, the gross profit margin has approached the lower limit, the gross profit margin of the chip link has stopped falling and rebounded, and the subsequent decline space is limited, and the leading enterprises in the industry will benefit significantly. With the increasing number of LED enterprises, enterprises with capital advantages have set up branches (Subsidiaries) Mergers and acquisitions, and strategic alliances to achieve vertical integration of industries. For upstream chip companies, they have high technical barriers and can quickly penetrate downstream through capital advantages. Upstream chip manufacturers, more through the acquisition, self-built companies to achieve the expansion of packaging and application links. For the midstream packaging enterprises, the technical barriers are relatively low, and it is generally easier to expand to downstream lighting enterprises. In the early days of the LED industry, Taiwanese packaging manufacturers entered the upstream chip link through mergers and acquisitions. In the current environment, this way of merger and acquisition is becoming more and more difficult. Enterprises with capital usually realize upstream penetration through self-construction. For downstream application enterprises, they enjoy high profit margins at both ends of the smile curve, generally not expanding to low-profit packaging links, but more expanding to high-profit chip links through strategic alliances.