Policy subsidies extended companies should embrace the winter

“Originally it was said that it could be issued in the third quarter of this year, but there is still no sound.” On the 9th, an LED executive close to the National Development and Reform Commission confirmed to the newspaper that the market’s rumors of subsidy of RMB 8 billion for LED lighting end users were not limited. It is late, but it also faces the possibility of "shrinking."

According to its disclosure, due to the state's pre-subsidy policy has led to the phenomenon of excess LED upstream investment, which makes the NDRC in the development of a new round of support policies more cautious, LED lighting terminal user subsidies are expected to be introduced within the year is less likely.

According to statistics from the root, China's LED output value is expected to reach 154 billion yuan in 2011, an increase of 22% year-on-year, while output is expected to grow by more than 50% year-on-year.

"30%-50% growth is the normal speed of LED development, but this 50% growth does not bring about 50% profit growth." Analysts pointed out that since the second half of this year, the upper, middle and lower reaches of the LED companies The gross profit margin dropped by 30%-50% year-on-year, and the industry is entering early winter.

Subsidy extension "shrinks"

The newspaper had previously learned from relevant sources that the National Development and Reform Commission and the Ministry of Finance are jointly studying and formulating policies to subsidize terminal sales of LED lighting. The preliminary information obtained is that this round of subsidies is not targeted at all companies. Their products need to be tested and certified. At last, about 12 companies were selected as successful bidders. Before this, it was rumored that the 8 billion yuan subsidy amount was paid in phases.

However, it was later reported that the first round of LED terminal subsidy policy will be based on commercial lighting, product applications lock LED downlights and LED spotlights two types of products, the initial subsidy of about 4 million. According to the average price of such lamps in the current market, and with reference to the past 50% subsidy standard, the subsidy amount is only about 200 million yuan.

"If it's a few billion, then it's probably about a few million for each company." Analysts pointed out that the subsidy symbolic significance is greater than the actual interest.

According to the national "Twelfth Five-Year Plan" technology development plan, in 2015, LED accounted for more than 30% of the domestic general lighting market, and the output value reached 500 billion yuan, while the current LED market penetration rate is only 5%. In order to promote the development of China's LED industry and reduce energy consumption, the Ministry of Science and Technology launched the “Ten City Ten Thousands” semiconductor lighting application demonstration city plan in early 2009. It subsidizes 30% to 50% of the investment increase compared to traditional lighting. The participating cities have increased from the initial 21 developed cities in Beijing, Shanghai, Shenzhen, and Wuhan to the current 42 cities.

This degree triggered a wave of heat in the industry. Many LED street lamp manufacturers report with this newspaper that after the ex-factory price of LED street lamps was about a thousand dollars, but the terminal prices of the government and purchasers became five or six thousand or even more than ten thousand yuan, and the profits were considerable.

However, with the constant addition of contentionists, the status of the LED street light market this year has deteriorated. According to Zhu Jianqin, president of Dajing Energy Management (Shenzhen) Co., Ltd., according to the current 1 watt of 3 to 4 yuan to calculate, 120 watts up to 360 dollars, including installation and five years of quality assurance, the profit is very meager.

In addition to street lamps, the country also subsidizes the chip production machines upstream of the LED. It is understood that a MOVCD machine has a government subsidy of more than three million yuan. In order to gain a commanding height, the company has purchased a large number of MOVCD machines and launched chip projects. This led to a sharp dive in upstream chip prices.

Since the beginning of this year, the price of LED chips has fallen by nearly 30%. Taking a 2-inch sapphire substrate as an example, the market price fell from the highest level of last year's $38 per piece to about $25 per piece at the beginning of the year to the current $7,8. However, Wang Lianghai, vice president of Tongfang Co., Ltd. believes that the current market chip prices have not yet bottomed out and there is room for further decline in the future.

"Early support for LED has led to excessive investment in the upstream chip. The principle of low bidding price for street lamps has led many poor-quality LEDs to enter the market. This violates the country's original intention." The above-mentioned LED executives close to the Development and Reform Commission revealed that In the light of the past, the NDRC will be more cautious in discussing the subsidy policy for civilian LEDs.

Enterprises Baotuan "winter"

According to statistics, in the first half of 2011, there were 69 investment projects with a total investment of over 100 million yuan, compared with 74 last year. For the upstream epitaxial wafers, the investment amount for the first half of the year was 71.794 billion yuan, which was the amount of investment for the entire year. 52.11%; The most popular investment in the first half of the year was the sapphire project. The contracted investment amounted to 21.506 billion yuan, which was 94.63% of the total investment in last year.

"Because the accumulated production capacity from the overinvestment in the previous year and even the previous year has forced many companies to adopt price warfare measures, the price of the chips has dropped. The current number of inventory reports is very high."

Sanan Optoelectronics showed that in the third quarter, the inventory balance of the company as of the end of September exceeded 930 million yuan, which has more than doubled from 31 billion yuan at the beginning of the year, while the growth rate of the balance of dry lighting photoelectric inventory of the same upstream has doubled to 138.4%. .

“To some extent, the decline in upstream chip prices is also good for the overall price reduction of LED.” Gong Weibin, chairman of Ruifeng Optoelectronics, told the reporter that the current survival status of midstream packaging companies is still healthy, but everyone’s days are much harder than before. , "The previous 30%-50% of gross profit may return to 15%-20% this year."

Gong Weibin believes that after experiencing excessive investment, the industry will eventually return to the essence. “If there is no gross profit of more than 30%, the production space in the upstream of the chip is more difficult; while the gross margin of 20%-30% in the packaging industry should be a relatively normal category. Because this is something that has technical expertise."

"Although the price has declined, the public's awareness of LED is not enough, and compared to energy-saving lamps, LED prices are more expensive, so the popularity is not up." Shenzhen Poly Industrial Co., Ltd. Chairman Xiao Ling that if The government can give support on the project and it will soon be able to stimulate the demand in the entire Chinese market.

In response to the current lack of domestic LED industry standards, 20 LED companies, including VEECO, Philips Lumileds, SAMSUNG LED, Intematix, BDO Runda, Inspur Huaguang, and Aveiro Optoelectronics, plan to launch the “G20” specification, which will , Indoor lighting, spotlights, and downlights are the four indoor lighting products that account for 80% of the market share. They have developed application products that exceed the national standards.

"In the current structural oversupination and unclear subsidy policies, LED companies should unite together to weather the current low level."