"Since 2011, China has fully implemented energy-saving and emission reduction, and LED products will gradually replace traditional lighting products." Zhao Xiaoma, director of industrial automation and electronics consulting at Frost & Sullivan, is very optimistic about the LED industry, "but it takes a long process, Not only overnight, the pursuit of LED companies by investment institutions has led to an ever-widening scale of investment across the industry, and at the same time it has created a bubble."
After fierce investment last year, the LED industry continued to be sought after by investment institutions in 2011. However, the over-expansion of investment scale has led to the emergence of a bubble in the industry as a whole.
In June 2011, Jiangsu Shangyu Lighting obtained a $10 million investment in Jinsha River. Such investment is not uncommon. In fact, the LED industry chain of Shangyu Lighting has been prosperous for several years. In the first four months of 2011 alone, the amount of investment has exceeded 30 billion yuan.
"Because of the support of national policies, the new energy field has broad prospects. Investment institutions that have not previously been involved in the industry have begun to participate and the market scale has continued to expand. However, the return period of new energy is longer than that of the Internet. This is a characteristic of the LED industry. "Yeyun Venture Capital founder Ye Dong said.
Domestic Difficulties “Although the domestic LED investment boom has not diminished, companies have been stuck in the middle and lower reaches of the industry chain and still have not escaped the simple manufacturing model,†said He Zaihua, a senior research fellow at China Investment Consulting. In this regard, Zhao Xiaoma also has the same point of view, "Most of China's enterprises and the LED industry chain in the upper reaches of the field are not, basically concentrated in the downstream packaging and application industry chain, and this part of the profit is very low, only 30 % of profits.†It is reported that there are about 4,000 LED companies in the country, but not many in the upstream industry, and the overall industry is over-represented, so more than 90% of companies can only be brutal in 30% of the profit market.
He Zaihua believes that China’s LED companies have an absolute advantage in terms of quantity, but are subject to high-end technology. Therefore, it is extremely difficult for core technologies and high profits to be mastered by foreign companies. The main difference lies in the mastery of key technologies. The degree of ownership, product performance and quality gaps, technological innovation, brand building and other aspects.
Among the LED companies in China, there are more than 1,500 companies in the packaging field, divided into three camps according to sales. First, there are more than 40 companies with annual sales of over 100 million yuan. Second, 400 companies have annual sales of between 10 million and 100 million yuan. In the end, basically, companies with annual sales below 10 million yuan are. The average sales of eight listed packaging companies in Taiwan, China, are 1 billion yuan.
“However, domestic companies also specialize in areas such as chips and extensions, and there are also companies that are shifting the industrial chain from the middle to the lower reaches upstream.†Zhao Xiaoma said. There are also some bright spots in domestic companies, such as Jingneng Optoelectronics. As a high-tech enterprise specialized in LED epitaxial materials and chip production, Jingneng Optoelectronics' technology relies on the research institute of Nanchang University.
"The crystal silicon photoelectricity LED technology has independent intellectual property rights, has a very good technical team and management team, and provides semiconductor lighting bulbs with lower cost and better performance for the global market. For LED product manufacturers, It is important to reduce the cost per lumen and increase the efficiency of LEDs."
Lu Bo, executive vice president of Jingneng Optoelectronics executive said. Jingneng Optoelectronics won the second round of venture capital investment such as the Jinsha River at the end of last year. After this financing, Jingneng Optoelectronics expanded its production capacity, has a market share of more than 10% in the domestic chip field, and was "Technology Review" by MIT. Magazine named "one of the top 50 most innovative companies in 2011" and is the only LED company in the world to be selected.
Guoxing Optoelectronics (002449, stocks) is the only listed company with LED packaging as its main business. It is mainly engaged in the R&D, production and sales of LED devices and components. With more than 30 years of technology accumulation, it is in the domestic LED packaging industry. leading position. Since its listing in July last year, China Star Optoelectronics has extended its industrial chain to the upper and lower reaches for vertical integration. On the upstream side, it established a joint venture with SemiLeds and established Xurui Optoelectronics, which specializes in LED epitaxy and chip production. In the downstream, it extends to the application field and provides lighting application products for projects such as municipal engineering and lighting engineering.
At present, there are many different investment entities in the LED industry, including venture capital institutions, other industry players, foreign capital and private capital. The scale of investment has been expanded compared to previous years. At the same time, the bubble generated by over-investment is also looming.
With a large number of foreign-funded enterprises entering the Chinese market, and at the same time holding patented technology as their killer, this is a fatal blow for most Chinese companies. In the face of strong rivals, domestic companies need to improve their competitiveness.
Foreign Advantages Nowadays, China's Taiwanese packaging companies and Japanese packaging companies have continued to intrude into mainland China. The business models of some of these companies, especially capital operations, are worth learning from. Internationally, there is a vertical management model that can span semiconductors, packaging, lighting and other industries. However, the management level of companies is very high. At present, only a small number of companies in Europe and America with strong strength and good management can operate, such as Nichia, Career, etc. . In contrast to this model, Chinese Taiwanese companies are more focused on achieving the most influence in a certain area. They can expand their control over the upstream and downstream through capital operations. This approach is more practical.
Take Yiguang, a leading company in the packaging industry in Taiwan, as an example, consider the relatively mature packaging technology in the middle reaches as a breakthrough point while investing in excellent upstream manufacturers and looking for the most favorable downstream channels with mature channels. In the upper reaches of the company, it will invest in wafers, wafers, and other outsourcing companies such as Taigu, and will extend the industrial chain to epitaxial wafers to ensure a well-performing and stable LED supply. Everlight as a major supplier of LG, Sharp, Samsung and other LED LCD TV manufacturers, invested billions of dollars in the downstream, with the capital operation mode, Everlight closely linked the LED technology development route and downstream market requirements. , enhance their own competitiveness.
The invested wafers have also acquired equity from Xiamen Jingyu, Taigu, and Guangsheng through investment and equity participation, and completed industrial chain integration. For enterprises, such a layout will not only benefit the company in a certain area. The strongest, and can get the scale of the industry to expand and profit growth. This model of Taiwanese enterprises in China is not only a model in which customers are shareholders, but also a combination of upstream and downstream industrial chains. Most of the giants of overseas giants such as Nichia, Osram, Citizen, and Career are manufactured in China's Taiwanese manufacturing industry. After entering the Chinese market, they are located in different areas. If Nichia captures the high-end display market, Cree is expanding its market for high-power products, while OSRAM captures most of the market for automotive taillights.
“The advantages of foreign companies are mainly reflected in the standards of first-class companies and the technology of second-rate companies. From the standpoint of standards, most foreign companies are standards-makers, including applications such as patents. From a technical point of view, international giants represent LEDs. The industry's most advanced level, especially the mastery of core technologies and the construction of innovative fields, is very prominent, and there is a large gap between Chinese companies, said He Zaihua.
In the LED market, due to the earlier layout of foreign companies, it has a certain market base, and the acceleration of investment and the strengthening of international cooperation have further increased the ability of foreign companies to control the market. Throughout the entire industry chain, foreign giants are undoubtedly standing at the highest end of the industry chain, are at the two ends of the smile curve, the most lucrative link is still occupied by foreign companies.
At present, the core technologies of the global LED industry are in the hands of giants such as Nichia, Cree, Osram, etc. In the field of epitaxy and chips, companies in the United States and Japan are monopolized. In the entire LED industry chain, upstream areas such as epitaxial wafers and chips occupy 70% of the profits, which are basically occupied by foreign companies. For example, Japanese companies rely on their innovative advantages in new products and new technologies. They mainly engage in the production of the highest value-added products. They basically monopolize the global high-end blue and green LED markets, and are the second largest in the world in terms of packaging and the first in production value. . However, China is the first in terms of output and the second highest in terms of output in the packaging industry.
However, although foreign companies have dominated, domestic companies have not lost their enthusiasm for being sought after by venture capitalists, and domestic companies are also striving to go global.
Breakthrough Bottleneck “Before a foreign company’s use of patent chips, it is generally very calm. It usually directly and quickly gives Chinese companies a heavy blow. Foreign companies’ policies for the use of patents by domestic companies are different, and they tend to be authorized for large enterprises. Small businesses tend to suppress, but they still impose a strict blockade on the technology in the upstream core areas, said He Zaihua. Therefore, in the face of foreign companies' siege and interception, domestic companies should give full play to their technical level and patent application and analysis capabilities in terms of early warning analysis, patent layout, etc., in order to build a coalition overall operation. At the same time, companies also need to improve their technological capabilities and avoid the risks of intellectual property rights.
Last year, companies in the lithium battery industry faced competition from foreign companies and established a club of 100 companies. Can China's LED companies follow suit? "Companies in the LED industry cannot set up a club like the lithium battery industry, because domestic LED companies are all going their own way. In addition, domestic companies face the challenge of foreign companies, and they must take chips and outreach as the breakthrough and upgrade their own technological level." Zhao Xiaoma said.
Tsing Yi Venture Capital invested in this May is a technology-based company. “We have taken a look at Avalon's advantages in terms of technology, team, and development prospects, and eventually chose Avalon,†said Ye Dong, founder of Tsing Capital.
As the first Chinese company to independently own advanced, mature LED technology and solid-state lighting in the United States, Avellon specializes in LED epitaxy and chip orientation. "We must strengthen technology research and development and application, and at the same time increase production capacity, and create first-class production suppliers of semiconductor lighting products with blue-green light LED epitaxial wafers and chips as the core," said Yan Chunhui, CEO of Avellon Group.
For investment in the LED industry, Jinsha River Venture Capital is very representative. Since 2005, it has invested in eight companies covering all sectors of industry such as epitaxial wafers, packaging and lighting applications. In 2011, the Shangsha Lighting Investment in Jinshajiang was the downstream LED company. Jinshajiang Venture Capital completed the layout in the LED industry chain.
The biggest obstacle that currently affects LED lighting products into the general lighting field is the high cost. "PowerXplore technology with proprietary intellectual property rights in LED drive and system integration is our technical advantage, and we also have four international patents. In terms of products, because of the high luminous efficiency, the same brightness costs more Low.This time we gain investment, we will take advantage of the vertical integration of the Jinsha River industrial chain, and use mass production effects to launch products with subversive costs in the market.†Sun Jianning, CEO of Shangyu Lighting, said.
"Shangyu Lighting has the ability to make the world's lowest cost, high efficiency light bulb, will grow into a world-class semiconductor lighting company within five years." Wu Shenjun, founder of Jinsha Jiang Venture Capital, said, "The LED market has great potential, will be With lighting replaced with LEDs, the market size will reach US$300 billion. The companies we invest in cover the entire LED industry chain, which can be said to pave the way for vertical integration of the industry chain.â€
“The domestic enterprises’ technology in the field of chips needs to be improved. There is also a need for breakthroughs in the direction of blue-green light. The good rate, quality, and performance of products are all places where domestic companies need to break through. In addition, epitaxial growth is also a major factor other than chip manufacturing. Enterprises need to focus on the direction of R&D. Although the package has become competitive in the domestic market, there is also room for improvement in the efficiency of light extraction. At the same time, the design of applied products is a technology that domestic companies need to improve, said He Zaihua.
Although domestic companies face great pressure from foreign giants, the state has increased policy support. LED lighting industry as a new energy-saving and environmental protection industry, has always been the country's attention, and another good news is that semiconductor lighting "Twelfth Five-Year Plan" will be introduced in September this year, this policy for domestic companies to boost market confidence, and For investment agencies, it indicates the direction.
After fierce investment last year, the LED industry continued to be sought after by investment institutions in 2011. However, the over-expansion of investment scale has led to the emergence of a bubble in the industry as a whole.
In June 2011, Jiangsu Shangyu Lighting obtained a $10 million investment in Jinsha River. Such investment is not uncommon. In fact, the LED industry chain of Shangyu Lighting has been prosperous for several years. In the first four months of 2011 alone, the amount of investment has exceeded 30 billion yuan.
"Because of the support of national policies, the new energy field has broad prospects. Investment institutions that have not previously been involved in the industry have begun to participate and the market scale has continued to expand. However, the return period of new energy is longer than that of the Internet. This is a characteristic of the LED industry. "Yeyun Venture Capital founder Ye Dong said.
Domestic Difficulties “Although the domestic LED investment boom has not diminished, companies have been stuck in the middle and lower reaches of the industry chain and still have not escaped the simple manufacturing model,†said He Zaihua, a senior research fellow at China Investment Consulting. In this regard, Zhao Xiaoma also has the same point of view, "Most of China's enterprises and the LED industry chain in the upper reaches of the field are not, basically concentrated in the downstream packaging and application industry chain, and this part of the profit is very low, only 30 % of profits.†It is reported that there are about 4,000 LED companies in the country, but not many in the upstream industry, and the overall industry is over-represented, so more than 90% of companies can only be brutal in 30% of the profit market.
He Zaihua believes that China’s LED companies have an absolute advantage in terms of quantity, but are subject to high-end technology. Therefore, it is extremely difficult for core technologies and high profits to be mastered by foreign companies. The main difference lies in the mastery of key technologies. The degree of ownership, product performance and quality gaps, technological innovation, brand building and other aspects.
Among the LED companies in China, there are more than 1,500 companies in the packaging field, divided into three camps according to sales. First, there are more than 40 companies with annual sales of over 100 million yuan. Second, 400 companies have annual sales of between 10 million and 100 million yuan. In the end, basically, companies with annual sales below 10 million yuan are. The average sales of eight listed packaging companies in Taiwan, China, are 1 billion yuan.
“However, domestic companies also specialize in areas such as chips and extensions, and there are also companies that are shifting the industrial chain from the middle to the lower reaches upstream.†Zhao Xiaoma said. There are also some bright spots in domestic companies, such as Jingneng Optoelectronics. As a high-tech enterprise specialized in LED epitaxial materials and chip production, Jingneng Optoelectronics' technology relies on the research institute of Nanchang University.
"The crystal silicon photoelectricity LED technology has independent intellectual property rights, has a very good technical team and management team, and provides semiconductor lighting bulbs with lower cost and better performance for the global market. For LED product manufacturers, It is important to reduce the cost per lumen and increase the efficiency of LEDs."
Lu Bo, executive vice president of Jingneng Optoelectronics executive said. Jingneng Optoelectronics won the second round of venture capital investment such as the Jinsha River at the end of last year. After this financing, Jingneng Optoelectronics expanded its production capacity, has a market share of more than 10% in the domestic chip field, and was "Technology Review" by MIT. Magazine named "one of the top 50 most innovative companies in 2011" and is the only LED company in the world to be selected.
Guoxing Optoelectronics (002449, stocks) is the only listed company with LED packaging as its main business. It is mainly engaged in the R&D, production and sales of LED devices and components. With more than 30 years of technology accumulation, it is in the domestic LED packaging industry. leading position. Since its listing in July last year, China Star Optoelectronics has extended its industrial chain to the upper and lower reaches for vertical integration. On the upstream side, it established a joint venture with SemiLeds and established Xurui Optoelectronics, which specializes in LED epitaxy and chip production. In the downstream, it extends to the application field and provides lighting application products for projects such as municipal engineering and lighting engineering.
At present, there are many different investment entities in the LED industry, including venture capital institutions, other industry players, foreign capital and private capital. The scale of investment has been expanded compared to previous years. At the same time, the bubble generated by over-investment is also looming.
With a large number of foreign-funded enterprises entering the Chinese market, and at the same time holding patented technology as their killer, this is a fatal blow for most Chinese companies. In the face of strong rivals, domestic companies need to improve their competitiveness.
Foreign Advantages Nowadays, China's Taiwanese packaging companies and Japanese packaging companies have continued to intrude into mainland China. The business models of some of these companies, especially capital operations, are worth learning from. Internationally, there is a vertical management model that can span semiconductors, packaging, lighting and other industries. However, the management level of companies is very high. At present, only a small number of companies in Europe and America with strong strength and good management can operate, such as Nichia, Career, etc. . In contrast to this model, Chinese Taiwanese companies are more focused on achieving the most influence in a certain area. They can expand their control over the upstream and downstream through capital operations. This approach is more practical.
Take Yiguang, a leading company in the packaging industry in Taiwan, as an example, consider the relatively mature packaging technology in the middle reaches as a breakthrough point while investing in excellent upstream manufacturers and looking for the most favorable downstream channels with mature channels. In the upper reaches of the company, it will invest in wafers, wafers, and other outsourcing companies such as Taigu, and will extend the industrial chain to epitaxial wafers to ensure a well-performing and stable LED supply. Everlight as a major supplier of LG, Sharp, Samsung and other LED LCD TV manufacturers, invested billions of dollars in the downstream, with the capital operation mode, Everlight closely linked the LED technology development route and downstream market requirements. , enhance their own competitiveness.
The invested wafers have also acquired equity from Xiamen Jingyu, Taigu, and Guangsheng through investment and equity participation, and completed industrial chain integration. For enterprises, such a layout will not only benefit the company in a certain area. The strongest, and can get the scale of the industry to expand and profit growth. This model of Taiwanese enterprises in China is not only a model in which customers are shareholders, but also a combination of upstream and downstream industrial chains. Most of the giants of overseas giants such as Nichia, Osram, Citizen, and Career are manufactured in China's Taiwanese manufacturing industry. After entering the Chinese market, they are located in different areas. If Nichia captures the high-end display market, Cree is expanding its market for high-power products, while OSRAM captures most of the market for automotive taillights.
“The advantages of foreign companies are mainly reflected in the standards of first-class companies and the technology of second-rate companies. From the standpoint of standards, most foreign companies are standards-makers, including applications such as patents. From a technical point of view, international giants represent LEDs. The industry's most advanced level, especially the mastery of core technologies and the construction of innovative fields, is very prominent, and there is a large gap between Chinese companies, said He Zaihua.
In the LED market, due to the earlier layout of foreign companies, it has a certain market base, and the acceleration of investment and the strengthening of international cooperation have further increased the ability of foreign companies to control the market. Throughout the entire industry chain, foreign giants are undoubtedly standing at the highest end of the industry chain, are at the two ends of the smile curve, the most lucrative link is still occupied by foreign companies.
At present, the core technologies of the global LED industry are in the hands of giants such as Nichia, Cree, Osram, etc. In the field of epitaxy and chips, companies in the United States and Japan are monopolized. In the entire LED industry chain, upstream areas such as epitaxial wafers and chips occupy 70% of the profits, which are basically occupied by foreign companies. For example, Japanese companies rely on their innovative advantages in new products and new technologies. They mainly engage in the production of the highest value-added products. They basically monopolize the global high-end blue and green LED markets, and are the second largest in the world in terms of packaging and the first in production value. . However, China is the first in terms of output and the second highest in terms of output in the packaging industry.
However, although foreign companies have dominated, domestic companies have not lost their enthusiasm for being sought after by venture capitalists, and domestic companies are also striving to go global.
Breakthrough Bottleneck “Before a foreign company’s use of patent chips, it is generally very calm. It usually directly and quickly gives Chinese companies a heavy blow. Foreign companies’ policies for the use of patents by domestic companies are different, and they tend to be authorized for large enterprises. Small businesses tend to suppress, but they still impose a strict blockade on the technology in the upstream core areas, said He Zaihua. Therefore, in the face of foreign companies' siege and interception, domestic companies should give full play to their technical level and patent application and analysis capabilities in terms of early warning analysis, patent layout, etc., in order to build a coalition overall operation. At the same time, companies also need to improve their technological capabilities and avoid the risks of intellectual property rights.
Last year, companies in the lithium battery industry faced competition from foreign companies and established a club of 100 companies. Can China's LED companies follow suit? "Companies in the LED industry cannot set up a club like the lithium battery industry, because domestic LED companies are all going their own way. In addition, domestic companies face the challenge of foreign companies, and they must take chips and outreach as the breakthrough and upgrade their own technological level." Zhao Xiaoma said.
Tsing Yi Venture Capital invested in this May is a technology-based company. “We have taken a look at Avalon's advantages in terms of technology, team, and development prospects, and eventually chose Avalon,†said Ye Dong, founder of Tsing Capital.
As the first Chinese company to independently own advanced, mature LED technology and solid-state lighting in the United States, Avellon specializes in LED epitaxy and chip orientation. "We must strengthen technology research and development and application, and at the same time increase production capacity, and create first-class production suppliers of semiconductor lighting products with blue-green light LED epitaxial wafers and chips as the core," said Yan Chunhui, CEO of Avellon Group.
For investment in the LED industry, Jinsha River Venture Capital is very representative. Since 2005, it has invested in eight companies covering all sectors of industry such as epitaxial wafers, packaging and lighting applications. In 2011, the Shangsha Lighting Investment in Jinshajiang was the downstream LED company. Jinshajiang Venture Capital completed the layout in the LED industry chain.
The biggest obstacle that currently affects LED lighting products into the general lighting field is the high cost. "PowerXplore technology with proprietary intellectual property rights in LED drive and system integration is our technical advantage, and we also have four international patents. In terms of products, because of the high luminous efficiency, the same brightness costs more Low.This time we gain investment, we will take advantage of the vertical integration of the Jinsha River industrial chain, and use mass production effects to launch products with subversive costs in the market.†Sun Jianning, CEO of Shangyu Lighting, said.
"Shangyu Lighting has the ability to make the world's lowest cost, high efficiency light bulb, will grow into a world-class semiconductor lighting company within five years." Wu Shenjun, founder of Jinsha Jiang Venture Capital, said, "The LED market has great potential, will be With lighting replaced with LEDs, the market size will reach US$300 billion. The companies we invest in cover the entire LED industry chain, which can be said to pave the way for vertical integration of the industry chain.â€
“The domestic enterprises’ technology in the field of chips needs to be improved. There is also a need for breakthroughs in the direction of blue-green light. The good rate, quality, and performance of products are all places where domestic companies need to break through. In addition, epitaxial growth is also a major factor other than chip manufacturing. Enterprises need to focus on the direction of R&D. Although the package has become competitive in the domestic market, there is also room for improvement in the efficiency of light extraction. At the same time, the design of applied products is a technology that domestic companies need to improve, said He Zaihua.
Although domestic companies face great pressure from foreign giants, the state has increased policy support. LED lighting industry as a new energy-saving and environmental protection industry, has always been the country's attention, and another good news is that semiconductor lighting "Twelfth Five-Year Plan" will be introduced in September this year, this policy for domestic companies to boost market confidence, and For investment agencies, it indicates the direction.
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