Overcapacity further exacerbates LED companies facing the survival of the fittest

According to media reports, the LED market is currently saturated, and the LED industry is eager for quick success, overcapacity, and vicious competition. Various companies are mixed, and everyone is insisting that even if they lose money, they must be produced. Judging from the situation of listed companies, as of the third quarter of this year, nearly 70% of LED companies experienced a decline in net profit. Qiwei shares went public in May this year, and the net profit of the third quarter reported a decline of more than 90%. The CSRC issued a warning letter.

However, under such market conditions, the LED industry, which has been in the downturn for a long time, has once again become the scent of capital. First, Xishan Coal and Electricity Co., Ltd., which has nothing to do with LED, announced its entry into the LED industry. Sunlight Lighting will then change the part of the “micro-mercury environmental protection and energy-saving lamp industrialization project” to the “annual production of 20 million (sets) LED lighting products industry. The project "; followed by, Furi Electronics also said that it will raise funds to focus on the development of the LED industry.

Enterprises in the LED industry have expanded their production against the trend, and there are also unrelated companies entering the LED industry. This will inevitably lead to further overcapacity and further deterioration of market competition. Excessive investment has made the LED industry oversupply, and many companies are in the middle and lower reaches of the lower technical barriers. In the future, LED companies will face a cruel survival of the fittest. Only a few companies will grow stronger, and more companies will face the fate of being eliminated.

From this level, blindly following the trend and expanding production capacity can not only make the company bigger, but it will become smaller and smaller until it is ruthlessly eliminated. Therefore, it cannot be done because of the big.

Director of the China Radio and Television Society Audience Research Association, Cao Xuehai, a member of the China Planning Association, said that one day in June this year, I heard that a familiar daily washing company in Jiangsu is going to launch a production line with an annual output of 100,000 tons of washing powder. Let me be shocked! Because I know the status quo of this company: its products are mainly sold in the rural areas around the city, plus the export, the annual sales are only about 100 million. Exports have fallen sharply this year, and sales have plummeted by 60%! Under such circumstances, if you start a production line with an annual output of 100,000 tons of washing powder, it is bound to go to the bank loan, which will increase the cost of the product due to interest payment; plus the product will not sell, it will increase the inventory, there will be a break in the capital chain. The situation, the consequences are unimaginable! I immediately blocked the company's production line by SMS, and soon came to this company to discuss, suggesting that the company's CEO will make the existing production line into a research and development base, increase the research and development of new products, and increase the added value of products. At the same time, focus on channel construction and brand promotion. At present, we will do a good job in selling the products directly to the dealers, providing quality services to the dealers, and doing a good job of paying back the money. In the near future, new products will come out, and the brand will start. It can use the OEM form to cooperate with the same industry, which will also resolve the fierce competition.

Cao Xuehai said that in fact, the ultimate goal of transformation and upgrading is to improve efficiency, not to replace all the original manufacturing industries with strategic emerging industries. The transformation and upgrading of enterprises should be scientific, that is, scientific planning, scientific management, scientific research and development, scientific manufacturing and scientific management. The total product category is not much, the scale is not the size, as long as it can improve efficiency, increase added value, and improve profitability, this is "real growth."

(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)

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