LED companies need to be prepared for safety

In recent days, anti-dumping investigations from countries such as the United States, the European Union, and India have caused China's photovoltaic industry to suffer a setback. Negative news such as layoffs, bankruptcies, reorganizations, etc. has been frequently reported. For the LED industry, which also depends on exports, will encounter the same situation, LEDinside forum has done some investigation.

Among those who participated in the survey, 40% or more agreed with the view that the LED industry will encounter anti-dumping. They believe that the government's subsidies are the root cause of accelerated anti-invasion of the LED industry. At the same time, nearly 40% of the people believe that at present our upstream core technology is weak, and the threat to foreign investors is not big, and it will not be counterproductive. In addition, 14% think that the LED industry will develop rapidly and will repeat the mistakes of photovoltaics. 7% believe that currently China's LED industry accounts for a small share of the global market, and there is no need to worry about being countered.

China's LED industry is unlikely to face anti-trafficking in the short term. First of all, China is currently the world's largest lighting processing and manufacturing base, but most of the core technology of LED chips is in the first-tier manufacturers in Europe and the United States, and they also need to use China's lamps to sell themselves. Therefore, before China has adopted large-scale chips on a large scale, foreign interests have not been compromised, and naturally it will not be a stone's throw. Second, LED lighting applications are in the initial stage, and the market demand is gradually increasing. And the price has been to promote the LED elbow, all businesses are trying to pass technology, reduce costs, to meet consumer demand for purchase. Until the LED lighting technology is mature and prices have not reached a reasonable conclusion, it is unlikely that China's LED will encounter anti-invasion attacks.

However, from the photovoltaic industry, we can also see the hidden dangers of the development of the LED industry:

First of all, lack of "core" pain, profit is limited. The chip is the core technology of the LED industry, but compared to the European and American manufacturers, our domestic chip R & D power is relatively weak, many products are foreign "core" under the Chinese manufacturing outerwear. Due to the lack of core technologies, Chinese companies often invest large sums of money to pay for royalties and hand over big profits to foreign companies. The revenue of these companies is naturally low.

Secondly, it is possible that counterproductive subsidies may be counterproductive. Because government subsidies are like a “double-edged sword”, while promoting the development of the industry, it is also an important factor restricting their independent development in accordance with market laws. In order to compete for subsidy, many companies have come to the rescue with a handful of ideas. Even some irrelevant companies have mixed in. They are eager for quick success, and the quality of their products is mixed. The pressure of overcapacity forces companies to lower prices and grab the market. The competitive environment is deteriorating.

Again, exports are not the only way out, and we need to think about walking. The photovoltaic industry was countered and exposed the shortcomings of its lack of domestic demand and excessive dependence on exports. Similarly, the LED industry should take warnings. At present, many LED companies' export business accounts for a very high share of the company's financial revenue. If desperate in foreign markets, once foreign investors initiate anti-dumping lawsuits, China's LED companies may be trapped in muddy and difficult to extricate themselves. Therefore, in order to preserve the strength and avoid being hit hard, companies that specialize in exports may wish to balance the ratio of domestic and foreign markets, expand sales channels, and walk in order to prevent problems.