Overinvestment in the LED industry shuffles fears

After the rapid development of the past few years, the impact of excess investment in the LED industry has begun to show. Some industry experts predict that the LED industry's reshuffle period will probably continue until mid-2014, and may even repeat the PV industry recovery.

Behind Haobo Optoelectronics, a large number of LED companies are experiencing pain or loss of profits. According to rough statistics from the industry, in the 42 LED-related listed companies, the profit in the third quarter decreased or reached 24 losses.

With the announcement of the third quarter report, Tianlong Optoelectronics, BDO Runda and Tiantong have suffered losses, and 21 LED companies have experienced a drop in net profit. Among them, Shilan Micro, China Microelectronics, and Chau Ming Technology's net profit fell by over 80%.

For the status quo of the LED industry, the phenomenon of excess upstream investment is mainly affected by two factors: On the one hand, the global economy is weak, investment students are slowing down, and most of the profits of domestic LED companies rely on exports; on the other hand, the market blindly follow suit. The phenomenon is serious. They get together at the low end and the long-term melee fights down the price.

According to the three-quarter report of Ganzhao Optoelectronics, total profit and net profit for the current period decreased compared with the same period of last year, which was mainly due to the fact that the chip price had a larger drop compared with the same period of last year and the chip's gross profit margin dropped.

Huacan Optoelectronics Directorate Office of the relevant person said that the company's sales have risen, but the price decline is greater. He Zaihua believes that the current LED market disorderly development, lack of demand, product concentration in the low-end features and the photovoltaic industry are exactly the same, if LED companies do not see the market environment in time, is likely to fall into a similar deadlock with the photovoltaic industry. Guo Xiu, secretary general of Guangdong Lighting Association, predicted that the LED industry reshuffle will continue until mid-2014.

The investment surplus in the LED industry reflects the blindness and lag in investment, and it can also be found that some companies that only want to use a single amount of money enter the concept of energy conservation after they enter the market, and they cannot use the advantages of LED lighting products. In the face of fierce market competition and the pressure brought about by the rise in raw material costs, these companies are willing to sacrifice their quality at the expense of price competition.

Many companies will release inventory through price wars, which will lead to low-end competition in the LED industry, making the entire LED lighting market chaotic, difficult to manage, and not conducive to the overall development of the LED industry. This will also lead to the LED industry reshuffle, making it difficult for China's LED lighting industry to achieve success in the short term.