[High-tech LED magazine report] Last year, the LED industry was in full swing. Since the middle of this year, the market has gradually slowed down. At the same time, the surge in the number of upstream equipment in the market has also brought about the continuous expansion of the entire industry, leading to the market in the second half of the year. A weak situation is also inevitable.

The fast-growing LED industry has entered a low point this year. In addition to the continuous decline in the prices of industrial chain products caused by fierce competition in the market, rising costs and compressing gross profit margins, the continued weakness of downstream demand has also directly impacted various manufacturers in the industrial chain. Many companies are beginning to think about the future of the industry and the business.

For the industry's current low, more industry insiders have attributed it to the rational return of the explosive investment market in the past two years.

But in the face of market downturns, different companies have different options.

Recently, Samsung Electronics said that it is currently considering the acquisition of the LED joint venture of the remaining Samsung Electric, but has not yet made a final decision, nor did it disclose more details on the time of acquisition and the way of acquisition. Founded in 2009, Samsung LED was formed by Samsung Electronics and Samsung Motors with an investment of 290 billion won (about 200 million US dollars). The two companies hold half of the shares, but the company's corporate management rights are owned by Samsung Motor.

Samsung chose to include the overall LED business in the industry downturn, from the upstream die, packaging to achieve vertical integration of downstream light bulbs, and branded its own brand, showing its determination to challenge Osram, Philips first-line brand in the lighting field.

Where is the traditional domestic lighting?
The National Development and Reform Commission officially released a road map for the elimination of incandescent lamps, and plans to basically stop its domestic use in five years. At the same time, the first batch of enterprises for the transformation pilot of incandescent lamp manufacturers were also announced, including Guangdong Benbang Electric Co., Ltd., Shandong Huatai Light Source Co., Ltd. and Nanpi Yaming Light Bulb Manufacturing Co., Ltd.

However, for these traditional professional incandescent lamp manufacturers, they have to face the strategic transformation of enterprises. "We are also considering the transformation of energy-saving lamps or other products, but they are all ideas, and have not yet been fixed," a responsible person of the relevant company told reporters.

For incandescent lamp manufacturers that need to be transformed, if they switch to energy-saving lamps, on the one hand, the market is fiercely competitive, and the sales price is declining. On the other hand, the rise in rare earth prices in the past two years has helped to increase the cost. The cost of transformation will increase a lot. If the LED lighting is directly transformed, the large amount of domestic investment in the past two years has already caused the overcapacity of this industry. According to statistics from the High-tech LED Industry Research Institute (GLII), the stock prices of 34 LED listed companies in the A-share market suffered a full-line decline in the first three quarters of this year, with an overall decline of 29.35%. Some of the companies’ cumulative declines during this period even More than 40%.

For the traditional lighting companies that have already achieved results in the field of energy-saving lamps, the current LED lighting market seems to have some difficulties for enterprises.

Chairman of Foshan Lighting, Zhong Xincai, has some opinions on China's traditional lighting industry. In an interview with reporters, he said: "The market is still very chaotic. There are more than 1,000 lighting companies in the country, many of which have not met the national standards. The products are also circulating in the market. But I think China's lighting industry is in the process of integration and merger. It is enough to leave only a dozen lighting companies in the future through series reorganization."

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