Opportunities and challenges facing China's LED lighting industry

As the LED lighting industry ushered in the rapid development of the spring tide, many controversies about its overheated investment emerged. Some even believe that the frenzied development will overdraw future capacity and market in the domestic market.

Is the outlook infinite or difficult? What opportunities and challenges does China's LED lighting industry face?

"Infinite prospects" lead the company to profit
“Under the same lighting effect, semiconductor lighting (LED) is more than 80% energy-saving than traditional light sources, and its life span is more than 10 times longer than traditional light sources.” In the Nanchang High-tech Industrial Development Zone, Luneng, executive vice president of Jingneng Optoelectronics Co., Ltd. A semiconductor blue light lamp told reporters.

As a new generation of environmentally friendly light source, LED is known as the most developed green lighting source in the 21st century due to its high brightness, low heat and long life. At present, China has included semiconductor LED lighting in the medium and long-term science and technology development plan, and has now formed an industrial chain of epitaxial wafer production, chip preparation, package integration and LED application.

Driven by favorable policies, the domestic LED industry has developed rapidly with the blowout.

Jiang Fengyi, vice president of Nanchang University, believes that since last year, the LED lighting industry has begun to develop rapidly from upstream to downstream, and reached the blowout state in the first half of this year. According to statistics, in 2009, China's LED lighting industry, there are nearly 60 upstream enterprises, more than 1,000 mid-stream device packaging enterprises, more than 2,000 downstream application enterprises, and more than 800,000 employed people. In 2009, the output value of the middle and lower reaches of semiconductor lighting was 82.7 billion yuan.

According to the research report of the High-tech LED Industry Research Institute, LED lighting has surpassed the backlight to become the fastest growing application market in the LED market. By 2015, the penetration rate of LEDs in the domestic lighting market will reach 1/4.

“As digital products replace film, LED lights will replace traditional incandescent lamps at unimaginable speeds.” Zhuang Shenan, chairman of Beijing Shenan Investment Group, said, “Under the market, many companies want to have a place. Currently many pharmaceutical companies in the South The factory and the winery are doing LED lighting."

Frenzy development exposes industry defects
Although the market expects such a high level, at this stage, due to blind development, China's LED lighting industry has exposed problems such as lack of core technology, insufficient innovation capability, and disorderly market competition.

"In terms of output value, the current penetration rate of LED in the domestic lighting market is only 5%. The core technology relies on imports and the overall cost is a stumbling block to the further development of the LED industry," said Zhang Xiaofei, a doctor of the High-tech LED Industry Research Institute.

"LED chips are like the engine of a car. The lack of core technology will directly restrict the development of this industry." Zhuang Shenan said.

It is understood that the main technologies for LED upstream chip production are in the hands of foreign companies, and the process of localization of technology is slow, which has affected the development of the industry. MOCVD epitaxial furnace and its related supporting technology are the highest end of the LED industry chain. At present, it mainly relies on imports, which greatly restricts the cost control of the upstream of the LED industry.

"As far as the overall level is concerned, China and the world's first-class level still have a gap of about two years." Jiang Fengyi believes that "many developed countries and developing countries or regions in the world are accelerating the development of semiconductor lighting technology and industry, in technology. China is in the second echelon."

The blind investment and lack of core technology make the Chinese LED lighting market mixed and mixed. Unstable quality is also a common problem faced by LED companies.

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