© verticalarray dreamstime.com Business | July 04, 2013
Chinese LED lighting manufacturers shift business home
The rise of the domestic China LED market has brought great business opportunities.
After the European debt crisis, the export-oriented Chinese LED lighting industry shifted their business to emerging markets. Exports to Russia, for example, has already accounted for 2.8% of China’s total exports. The Chinese domestic LED lighting market has also become the major focus of manufacturers. Government bidding project support is a significant influencing factor; because the Chinese LED lighting market is deeply affected by the policy, an in-depth understanding of China’s policy for LED lighting would help understand the mechanism of the Chinese market. The Chinese LED lighting industry is highly dependent on exports. Europe and the US are ideal markets for LED lighting market development due to customers’ less price sensitivity and strong interest in energy saving and environmental awareness. Therefore, in the initial stages of China’s LED lighting business, the Chinese LED industry relied heavily on exports to Europe and the US and was deeply involved in the global industrial chain. According to LEDinside’s Chinese LED lighting market report, data from Chinese customs showed that in 2012, China’s LED lighting fixture exports amounted to approximately 5.8 billion USD. Japan, Western Europe, and the US were the major LED lighting export markets, in which the US market, accounting for approximately 24% of China’s total exports, was the largest export market. The major export markets are becoming more concentrated each year; in 2012, the top 8 export markets (including 4 European countries) accounted for 62.7% of China’s total exports. In 2012, Russia became one of China’s top ten export markets by achieving a profit of 160 million USD (a 49% increase compared with that of 2011). Due to the European debt crisis, LED lighting demands in European markets (and even in the US market) have decreased. Several LED lighting manufacturers that overly relied on foreign trade were struck by the sudden decline in orders. Export-oriented LED companies in Shenzhen, Ningbo, and Dongguan, for example, suffered an unprecedented downturn; several small and medium-sized companies were even forced to lay off employees and reduce production in order to avoid business bankrupt. On the other hand, China’s huge domestic market also became a solution to the sharp decline in LED export orders. According to China’s lighting market scale data, residential lighting products were most widely adopted in China (approximately 4.2 billion products), making the residential lighting market the largest potential LED lighting replacement market. However, due to the high price, the LED lighting penetration rate was low and the expansion of the residential LED lighting market was hindered. As for the commercial and public lighting market, demands for HID lamps and fluorescent lamps with high luminous flux are significant; the total lighting demand in these markets was only slightly less than that of the residential market. Commercial lighting products have a shorter replacement cycle, and buyers in this market can accept a higher price, thus the LED lighting penetration rate in the commercial lighting market could be rapidly enhanced. Unlike mature markets such as Europe, the US, and Japan, the Chinese LED lighting market may easily be affected by the policy. Therefore, an in-depth understanding of China’s policy for LED lighting would help understand the mechanism of the Chinese market, and by observing government bidding projects and market trends, the policies as well as China’s resource allocation would become clear. CEIEC was commissioned (by Ministry of Finance, National Development And Reform Commission, and The Ministry of Science And Technology) to hold the second public subsidy bidding project “2012 SSL Product Fiscal Subsidy Promotion Program” in Beijing on August 13, 2012. This project was the most formal public bidding regarding the LED lighting industry that was held by the government. The Chinese government tends to promote domestic LED lighting by subsidizing indoor and outdoor lighting products. In addition, local governments have also announced policies based on “The 12th Five-Year Plan” to encourage investment and development in the LED industry. Such promotion may deeply enhance LED lighting popularization in the Chinese lighting market. LED lighting product price fall below average price, manufacturers aggressively seize market channels Due to the oversupply of LED chips and other key raw materials, LED lighting product price has dropped to a more reasonable level. LEDinside’s statistics showed that in the Chinese market, 7W bulb price was between 45RMB-55RMB (10USD per Klm ), showing a price decline of more than 40% within one year. Knowing that the price-performance of LED lighting products has been accepted in the Chinese market, many LED lighting companies have started to do brand management and seize market channels. Traditional lighting manufacturers with brand resources and market channel advantages have also increased the LED lighting product lines in order to compete with new comers. Currently LED lighting marketing in China is mostly based on project and distribution channels. After 4 years of LED promotion by the government, the distribution channel has expanded from traditional shops to exclusive LED lighting stores and shopping centers. Moreover, in order to provide customers with a familiar shopping platform, lighting manufacturers have also started to sell LED lighting products with high replacement needs (such as light bulbs and light tubes) via the internet. LEDinside estimates that by 2015, the ratio of distributors and online shopping malls will increase to around 40%. In 2013, most of the LED lighting companies have started to re-examine their market channels. To traditional foreign trade enterprises, distributors are their domestic customers; to online businesses, distributors are their direct consumers; to companies that transferred from package to LED lighting, distributors are their downstream customers. Lighting distributors have clearly become the critical market channel of all types of LED lighting industries; realizing the economic advantages of LED lighting, they have continued to expand their LED lighting product line and participate in tenders of each LED lighting brand. Related industries are all aggressively investing in LED lighting in order to seize the business opportunities brought by the popularization of LED lighting.
Farnell adds Sorensen power supplies to its roster Distributor Farnell announces that it has added Sorensen, the premier DC programmable power supply brand from Ametek, to its range of power supplies.
Infineon raises EUR 1 billion following successful share placement Infineon informs that the company placed 55 million new shares, following an accelerated bookbuilding process with institutional investors, under the exclusion of subscription rights. The shares were placed at a price of EUR19.30 per share, meaning that the company managed to raise EUR 1.06 billion.
Skeleton Technologies strengthens management with new COO Skeleton Technologies has appointed Ants Vill, former Vice President of Product, as Chief Operating Officer.
SiPearl chooses Germany for its first international operational subsidiary SiPearl, a designer of the microprocessor for the European exascale supercomputer, is opening its first international subsidiary in Duisburg, in the Ruhr region, Germany, in order to build closer connections with its German partners and future clients.
DELO reports increased revenues despite current pandemic DELO closed the financial year that ended on March 31 with a turnover of EUR 163 million. This is an increase of almost 5% compared to the previous year (EUR 156 million).
China falls far short of its "Made-in-China 2025" goal IC production in China represented 15.7% of its $125 billion IC market in 2019, up only slightly from 15.1% five years earlier in 2014. IC Insights forecasts that this share will increase by 5.0 percentage points to 20.7% in 2024 (one percentage point per year on average).
COVID-19 highlights the gravity of the secondary market for SME Cha Jin-Seok, Chief Financial Officer of SK Hynix, said it best in the company’s Q1 earnings call, “Because of a never experienced pandemic, even basic business activities such as maintaining normal operations and predicting future demand have become challenging tasks.”
GlobalFoundries to implement ITAR at US manufacturing facility GlobalFoundries plans to implement export control security measures at its most advanced manufacturing facility, Fab 8, in Malta, New York.
Rebound Electronics expands in Asia The independent supplier of electronic components says it is investing to increase its market coverage in Asia with the opening of several new offices and setting up a customer service & telesales centre.
Samsung expands foundry capacity with new production line Samsung Electronics says that it plans to boost its foundry capacity at the company's new production line in Pyeongtaek, Korea, to meet growing global demand for extreme ultraviolet (EUV) solutions.
Super Dry Totech expands Long Term Storage Solutions offering The most recent development for Super Dry Totech, is the acquisition of a new building to expand on capacity & to minimise risk by assuring continuity should a disrupting incident occur in one of the facilities.
Ynvisible acquires electrochromic display company rdot Printed electronics specialist, Ynvisible Interactive, announces that it will acquire the printed electrochromic displays business of rdot AB of Gothenburg, Sweden.
Manz receives follow-up order for display production equipment Manz says it has received an order with a total volume in the low double-digit million euro range for display production equipment.
Aehr Receives initial order from new customer for FOX-NP solution Aehr Test Systems says it has received orders from a new customer and their subcontract manufacturing supplier for a FOX solution including a FOX-NP full wafer test system, an initial WaferPak Contactor, and a FOX WaferPak Aligner to perform production qualification of their silicon photonics devices.
AIM names new director of product management AIM Solder has appointed Timothy O’Neill to the position of Director of Product Management.
Seoul Semi files patent suit against automotive LED light distributor Seoul Semiconductor says it has filed a patent infringement lawsuit in the United States District Court for the District of New Jersey against Onyx Enterprise Int’l Corp., a distributor of automotive components.
X-FAB expands foundry offering for silicon-based microfluidics In order to address heightening demands, X-FAB Silicon Foundries SE, has taken steps to simplify the integration of microfluidic elements with CMOS and SOI dies.Load more news