How the LED Industry Faced the Buzzed Speculators in 2012

Not long ago, Wu Zongxian's LED business was running short of funds, which led him to sell the only single-family villa in Jade Villa at a price of more than NT$400 million and move to a leasing building. However, as early as three years ago, Wu Zongxian, who had just become chairman of the board-listed company ASL Electronics, confidently claimed to be the LED industry's Jay Chou. And expressed that we should use a low-cost strategy to eat a piece of cake in the LED industry.

In the eyes of that year, doing LED is much simpler than hosting. Now it seems that the LED industry is not as easy as he imagined.

Speculators pocket money and enclosure, and price wars disrupt the normal order. The current LED industry has low thresholds and disorderly standards. Enterprises have swarmed into the industry, causing confusion in the industry. It also increases corporate speculation and has a variety of speculative methods.

Some small factories with no money and no capital have no fixed market, no strict quality control, no investment in management costs, no investment in research and development costs, and finally they can take over one order and earn a little more money. However, the quality of products, after-sales services, and a series of factors that affect the sustainable development of enterprises are not the scope of their consideration. Only relying on low-quality, low-price competition to earn market share, such low prices have a considerable impact on the market. At the same time, it also makes it difficult for normal-production companies because if they follow the speculators to drive down prices, it means The loss of profits, if not followed, may mean the loss of the market. But the products they produce have a benefit, and they are very cheap. As far as consumption is concerned, most of the products that look like the same are mostly cheap ones, and those that are cheap, or are of poor quality, or they are it is good. This not only undermines the reputation of the domestic LED industry, but also makes China's LED industry left a very bad impression on the international.

Some speculators with money and capital can say that the motivation for doing this is not pure, that is, they are optimistic about the funds and land provided by the government; it is learned that some local governments not only give the land use rights, but also give land ownership, Enterprises can directly use land as collateral for bank loans. Then use these loans to invest in a new round of capacity expansion. After the explosive development of the entire industry chain of the LED industry in the past two years, the trend of overcapacity has now been presented. In the financial statements of related listed companies, the gross profit margin has declined and the performance growth rate has declined. Intriguingly, the IPO enthusiasm of many LED companies has not diminished at the same time as the new shares have broken through. Liad, far-field optoelectronics, jufei optoelectronics, rectangular lighting, a large number of new LED shares will successively enter the IPO phase. This can not help but ask people to get together LED stocks listed, brought to investors what is a pie or a trap?

The industry's exaggerated winds prevail, and where will the outlets be?

Many people are worried that the LED industry is now forming a very clear scissors, that is, the stronger the stronger, the weaker the weaker situation. In fact, I think, this situation does not have to worry about, is now a market economy, the survival of the fittest, only speculation into the LED industry, was eliminated as a matter of course.

What should be worried about is that speculation has become a trend, large companies have large companies speculative methods, small businesses have small businesses speculative methods, and everyone has gone speculative, then who will bear the heavy responsibility of industry development?

Looking at the current situation, companies in the process of transformation have large and small scales and they have started one after another. They should recognize their own conditions and conditions to distinguish them. The current plight of the LED industry is a stage in this development process. The current pain is for the industry to develop more standard. The formation and development of an industry generally goes through three stages: the budding period, the rebuilding period, and the maturing period. That is, from the start of the few companies that are few, and then many companies go to the forefront to seize business opportunities, and then according to market demand, Promote the industry reshuffle, and then form a brand pattern, there are a few oligopoly or lead the industry's development.

Therefore, the current overall situation does not mean the end of the industry, nor does it mean that the industry has no prospects, and it is not necessary to overly pessimistic and panic.

Some industry experts believe that the current problem of the individual bankruptcy of the industry is mainly due to its own and not universal. The author believes that the closure is a warning. In the future, corporate investment projects should become more cautious. Do not blindly expand because of the preferential conditions for the government to attract investment. The development of enterprises needs to rely on themselves, not only the core technologies and standardized management systems, but more importantly, rational expansion.

At the same time, fully considering its own capital and technical strengths and market development prospects can support the expansion of production capacity, because when hundreds of billions of funds are simultaneously turned into the LED industry, risks such as overcapacity, disorderly price competition, and local protection will occur. It is infinitely enlarged. When the investment is settled, the government will not pay for the company's future. The company's future development depends entirely on its own creation.

In any emerging industry, the general trend will not change, and there will certainly be ups and downs in the development process. Those mature industries have also experienced the Phoenix Nirvana and are born again without being overly pessimistic. The collapse of several companies cannot treat the entire industry with the mentality of 'knowing one leaves'. After all, a company can fall, but the industry will eventually have its own value. We don't need to panic too much and we must not believe in rumours. As media organizations and industry organizations can not exaggerate or distort the facts of corporate failure.

In fact, not only the LED industry, but also home appliances, textile and other industries, have also faced such a situation. However, after shuffling, the home appliance industry only left some TCL, Haier and some other industry giants. Now that it has been difficult to identify the small home appliance manufacturers, it is said that the old popular mobile phone handsets are almost ready to be beaten to the ground. However, looking now, there are also few speculators.