Policy encourages outbreak of LED upstream

The outbreak of China's LED upstream market may be attributed to government support. However, IHS also began to see the development of China's packaged LED market. Most Chinese lighting manufacturers are focused on the opportunities brought by LED lighting, and thus quickly completed the transformation of their traditional business to LED lighting manufacturers.

OFweek Semiconductor Lighting Network News With the increasing popularity of LED technology in China, as the world's largest lighting product production base in China in the past few years experienced rapid development of the LED industry.

From 2010 when the Chinese central government subsidized metal organic chemical vapor deposition (MOCVD) equipment, a large number of new companies entered the industry and purchased hundreds of MOCVD equipment to produce LED chips. As many companies have gone bankrupt or acquired, the companies that survived the same period have become bigger and stronger, playing an increasingly important role in the global LED lighting arena.

Sanan Optoelectronics is a typical example. The company’s 2-inch wafer production capacity has a global market share of only 2% in the fourth quarter of 2010 and is expected to exceed 14% by the end of 2015. In addition, its technology has also improved over the same period, and continues to devour the market share of Taiwan, South Korea and other international LED companies.

The outbreak of China's LED upstream market may be attributed to government support. However, IHS also began to see the development of China's packaged LED market. In early 2014, China's largest packaged LED manufacturer, Mlinsen (MLS), entered the top 10 of the global industry for the first time. Since then, the company's rapid expansion has now reached 20 billion LED chips per month, making it the world's largest packaging LED manufacturer. Its revenue also reached the 7th in the world in the third quarter of 2014.

In the end, with its tens of thousands of lighting product manufacturers, China has become the world's largest lighting product manufacturing base, and will continue to maintain this position in the next few years.

Most Chinese lighting manufacturers are focused on the opportunities brought by LED lighting, and thus quickly completed the transformation of their traditional business to LED lighting manufacturers. In fact, several of the largest Chinese manufacturers currently have the capacity to produce more than 10 million LED bulbs per month. In addition, these companies are also trying to build their own brands in order to compete in the international market. For example, Op Art had a strong presence in the lighting and construction exhibition in Frankfurt, Germany in 2014.

Given the increase in market share of Chinese LED manufacturers in the entire industry chain, 2015 will undoubtedly be a key year for the global LED industry. However, in order to compete with international companies and keep growing, Chinese manufacturers must overcome the perception of the quality of their products that continues to plague them while ensuring that they maintain a low price level.