Shenzhen LED Industry Development Analysis

After years of development, China's LED industry has initially formed a relatively complete industrial chain, forming a semiconductor lighting engineering industrialization base in more than a dozen countries such as Shanghai, Dalian, Nanchang, Xiamen and Shenzhen. In terms of geographical distribution, currently China's LED industry can be divided into five major economic industrial zones: the Yangtze River Delta Economic Zone, the Bohai Economic Zone, the Pearl River Delta Economic Zone, the Handan Economic Zone and the Midwest Economic Zone. . In general, the Pearl River Delta and the Yangtze River Delta are the most concentrated regions in the domestic LED industry. The upstream, middle and lower reaches of the industry chain is relatively complete, and it has concentrated more than 80% of related companies in the country, and is also the fastest growing region in the domestic LED industry. Obviously, LED-related equipment and raw material suppliers have settled in these two regions.

Among them, the Pearl River Delta region started earlier due to industrial development, and it took a relatively long time to undertake the transfer of foreign LED industry and industrial layout. The development of LED middle and lower packaging applications is the most mature. As the leader in the domestic LED industry, the LED's overall output value exceeded 200 billion yuan in 2012, making it the largest LED industry cluster in the country. Among the global LED packaging companies, more than 70% of LED packaging companies are located in China, while 50% of LED packaging companies in China are concentrated in the PRD. In the downstream LED display, LED lighting, LED backlighting and LED plant growth lights and other applications in the Pearl River Delta region occupy a large proportion.

I. LED Industry Characteristics of the Three Economic Circles in the Pearl River Delta

In 2008, under the impact of the international financial crisis, Guangdong Province issued the Outline of the Plan for the Reform and Development of the Pearl River Delta Region (2008-2020), and introduced a number of measures to adjust the economic structure, change the mode of growth, and establish a world-class economy including Hong Kong and Macao. The development strategy of the Pearl River Delta Metropolitan Region will give full play to the leading role of radiation in the central cities of Guangzhou and Shenzhen, optimize the functional layout of the east coast of the Pearl River Estuary, and upgrade the development level of the Pearl River Bank in the west coast. Establish a unified big market to realize the free flow and division of labor among the major PRD cities. Driven by the implementation of the strategic planning outline, the Pearl River Delta is gradually forming three economic circles: “Deep Guanhui”, “Zhuzhongjiang” and “Guangfolu”.

Along with the development of the three economic circles of “Deep Guanhui”, “Zhuzhongjiang” and “Guangfolu”, the LED industry in the three major economic circles also presented their own different characteristics.

Relying on the advantages of provincial capital cities and regional cultural education centers, the LED exhibition service industry in the Guangzhou-Foshan region is relatively advanced. Guangya, Zhaoxin Group and Zhongke Hongwei have strong research and development capabilities in the upstream MOCVD machines. LED industrialized production bases include Guangzhou Huadu and Foshan Nanhai. Due to the late construction of the industrial base, the distribution of LED companies in this region is relatively scattered, and the industrial aggregation effect is not high.

The LED industry structure in the Zhujiang River area takes Zhongshan as the radiation center. Zhongshan is the largest lighting distribution center. The traditional lamp lighting production base has the experience of lighting design accumulated in the traditional lighting era. The LED home design and lighting design are dominant and the products are mostly LED. Home lighting, decorative lighting, downstream application supporting materials developed.

As the national semiconductor lighting industrialization bases in Shenzhen and Dongguan, the LED industry in Shenzhen Guanhui District has the most mature development and the most complete supporting facilities. The industrial scale is also the largest in the Pearl River Delta region. With the electronic industry base as the guide, the company is well-established in the field of LED driver circuit design, intelligentization, and optical design. The main products are LED commercial lighting and public lighting. There are many listed companies and enterprises above designated size in the region. Shenzhen is the largest LED packaging and LED display production base in China. Dongguan attracts many Hong Kong and Taiwan LED companies, and Huizhou attracts a large number of international companies. The disadvantages are homogenization, heavy repeated investment, serious internal competition, Shenzhen's Innovation and Technology Park, Songshan Lake High-tech Industrial Park in Dongguan, Zhongwei High-tech Zone in Huizhou, etc. The similarity is high, and the industry similarity coefficient between Dongguan and Shenzhen is as high as 97.02. %.

Second, Shenzhen LED industry status quo

a) Shenzhen LED industry regional distribution

In 2012, the number of LED enterprises above designated size in Shenzhen (the whole industry chain statistics) was about 1,780, accounting for 29.18% of the total number of LED companies in the country (the preliminary statistics currently include about 6,100 LED companies), which is about 100 fewer than in 2011.

b) Shenzhen LED industry distribution

From the perspective of the number of companies involved in the distribution of LED industry chains, Shenzhen LED companies mainly focus on mid-stream packaging and downstream applications. The largest number of LED interior lighting companies is 1,020, followed by LED-related materials, 759 companies, and again LED. The number of packaged enterprises reached 565; LED chip epitaxial wafer manufacturers with the lowest number of companies in the distribution of LED industry chains, only Shenzhen Orund involved in this field, followed by LED equipment manufacturing companies, only 25. The number of enterprises in the core key equipment and upstream chip wafers is too small, accounting for only 1.46% of the total number of enterprises, which has become a bottleneck restricting the development of Shenzhen LED industry.

From the perspective of the total industrial output value of each category, the LED display industry is the highest, with 187 enterprises with a total industrial output value of 16.87 billion yuan, and over 50 enterprises (above 100 million yuan in output value) above designated size; followed by 565 LED packaging industries. The total industrial output value of the company reached 15.6 billion yuan, and the number of enterprises above the designated size (companies with an annual output value of 50 million or more) was about 200. Shows that Shenzhen's LED display industry and LED packaging industry have developed more mature, more large-scale enterprises, in the international and domestic markets have certain advantages.

From the perspective of the international and domestic LED industry, the current LED interior lighting has already had the alternative conditions for traditional lighting. LED lighting has replaced the traditional light sources and the trend of rapid popularization has already formed. However, in the past 2012, the basic situation of the LED interior lighting industry has not been greatly improved. The market that is expected to break through still has not achieved a breakthrough and the price has been severely declining. The enterprises in the industry are struggling to survive in difficult circumstances. In addition, the relatively mature LED display industry prices have continued to decline, and the overall price of mainstream products in 2012 has dropped by 3% to 14% from the same period of 2011. The domestic LED display industry is led by capital forces to restructure and integrate the industrial structure. In 2012, the display industry has repeatedly reported news of corporate closures or reorganizations. In 2013, with the continued expansion of large-scale enterprises, the advantages of scale appear, and the living space of small and medium-sized enterprises will be further compressed. In the next two years, the integration and adjustment of LED interior lighting and LED display will continue, with brand advantages and scale advantages. Enterprises with technological innovation advantages will occupy a dominant position in integrated mergers and acquisitions, and will further develop and grow.

At present, a large number of technology-based enterprises have emerged from the market competition, formed their own core technologies and manufacturing advantages, occupied a leading position in the subdivided field, and have strong international competitiveness. In the future, with the integration of the industry, this The approved enterprises will achieve rapid development and the scale of the industry will continue to expand. They will compete on the international and domestic stages with world-class LED companies.

Third, the main features of Shenzhen LED industry development

1, mainly private enterprises, mainly small and medium-sized enterprises

In the "Deep Guan Hui" economic circle, Dongguan LED industry has a large number of Taiwan-funded enterprises, Huizhou US-funded CREE, Korean-funded LG is the industry leader, and Shenzhen, more than 80% of LED companies are founded in Shenzhen, grow up Private Enterprise.

At present, among the commercial entities registered in Shenzhen, there are 490,000 enterprises, accounting for 49% of the total number of commercial entities, and 510,000 individual industrial and commercial households, accounting for 51%. Among the enterprises, there are 454,000 domestic and private enterprises, accounting for the total number of enterprises. Of the total amount, 92%, registered capital totaled 1,895.1 billion yuan; foreign investment companies had 36,000, accounting for 8%, and registered capital totaled 64.8 billion US dollars. In addition, there are many small and medium-sized enterprises in Shenzhen, with 390,000 registered capital below 10 million, accounting for 92% of the total, 10 million to 10 million, 30,000, or 7%, and over 1 billion. More than a thousand households, accounting for 1%.

In the same amount in the LED industry, the number of LED private enterprises in Shenzhen accounted for more than 80% of the share, active private enterprises is to promote the rapid and sustainable development of Shenzhen LED industry guarantee.

2. Strong industrial foundation and product engineering design

Shenzhen, as the world's electronics industry production base and LED packaging industry base, not only provides all necessary supporting conditions for the development of the LED industry, but also provides an important application market for LED products. The development of the electronics industry has enabled Shenzhen LED industry to have comparative advantages in circuit design and optical design of products, and to understand more accurately in terms of light output and intelligence; in addition, Shenzhen lighting application companies mainly use LED tubes, downlights, spotlights, etc. The engineering channels mainly circulate products. In the engineering application of lighting products, several different manufacturers' products are often selected at the same time. The interfaces of the products are required to be standardized and unified. The product structure, the electrical connection method, and the optical There are many considerations in terms of generality such as design, which in turn inhibits the differential development of engineering products. Shenzhen LED product design tends to be characterized by modularity, intelligence, humanization, and other characteristics, and the "Zhuzhongjiang" regional distribution of decorative products focus on differentiated development is slightly different.

3. Declined export dependence, brand influence gradually improved

Guangdong Province is a major province of foreign trade in the country. It has exceeded 150% when it has the highest foreign trade dependency. As the LED industry took the lead in the development and developed a more mature region, Shenzhen LED industry through independent innovation, strategic direction, successful from the external processing and trading enterprises It has developed into an LED company with its own brand and both internal and external sales. In 2012, Shenzhen's regional LED industry exported a total of 6 billion yuan, accounting for only 7.07% of Shenzhen's total LED output. Shenzhen LED packaging companies, LED display companies and LED accessories materials companies have a certain brand influence in the international and domestic markets, occupying the leading position in their respective market segments.

Fourth, the future development trend of Shenzhen LED industry

a) The recovery of industry sentiment, short-term supply and demand ease

Recently, the country has issued such policies as the "Semiconductor Lighting Energy-Saving Industry Plan" and "China's Roadmap for Lowering the Hg Concentration of Fluorescent Lamps" and has made more detailed and in-depth developments in the direction, goals, and product standards of the LED lighting industry. Stipulates that it is necessary to supplement the end product in terms of finance. In addition, Guangdong Pearl River Delta region will complete the transformation of LED public lighting by the end of 2013. It is expected that the construction progress of the tendering project will be accelerated, and LED public lighting will be accelerated. In the area of ​​commercial lighting, some shopping malls, etc. have already started replacing LED lamps. It is expected that as the price difference between LED lamps and energy-saving lamps continue to shrink, the civilian market will gradually start. In addition, some LED segmentation market segments such as LED display screens have reached a stage of maturity, their application areas have expanded, and the market scale has steadily increased. It is expected that the contradiction between supply and demand in the LED industry will be eased in 2013, which will be beneficial to the development and expansion of LED companies.

b) Adjustment and optimization of industrial structure

Due to the impact of international and domestic situations, the domestic LED industry shifted from a rapid expansion period to an integrated adjustment period in 2012, and the industrial structure was re-adjusted. The number of Shenzhen LED industry enterprises was reduced by about 100, and some tens of millions of small-scale packages were sold. And lighting plants have collapsed due to high channel inventory, slow cash flow, and sharp price declines. The Shenzhen LED industry structure was further optimized in this wave of consolidation adjustments, and the company’s anti-risk capability was enhanced, and the industry’s development was further standardized. In the next two years, with the LED industry gradually entering a mature stage, Shenzhen LED companies will continue to integrate and optimize. Enterprises with scale advantages, technological innovation capabilities, and brand leadership will stand out in the process of merger and acquisition, and the industrial structure will continue to be optimized.

c) Expansion of business scale, increased investment in technology, and appearance of medium and large-sized enterprises

In the past two years, a group of leading companies in the industry have successively landed on the capital market. The inflow of capital has brought sufficient cash flow to enterprises, which has prompted companies to expand their production scale and increase investment in R&D technology. The expansion of scale and technological breakthroughs have also promoted Business turnover increased. With the successive mass production of new input capacity, the scale of LED companies will further expand. In 2012, the revenue of some LED companies in Shenzhen has exceeded 1 billion yuan. With the continuation of mergers and acquisitions in 2013, the industrial competitive advantage will further provide technological advantages. Enterprises with channel advantages and scale advantages will be more concentrated in the industry, and a small number of large LED companies will form.