Xu Shihong: Taiwan LED needs to adjust its business strategy
China's mainland LED market demand for business opportunities is huge. Xu Shihong, general manager of Taiwan New Century Optoelectronics, said that in recent years, China's mainland LED industry has developed rapidly. The main reason is that many talents and resources technologies in Taiwan continue to enter the mainland, and LEDs are not high enough. China's mainland also lists LED as a key development industry. From the upstream to the downstream, various patented technical materials and products are planned to be produced by themselves. At present, the main advantage of LED practitioners in Taiwan lies in the integrity of the industrial chain and process technology. It is necessary to adjust the business mentality and strategy mode, which is more suitable for the recent changes in the mainland China market.
Taiwan's listed LED chip factory New Century Optoelectronics, the main products are blue light, green LED, recently in the mainland China's outdoor billboard market has been quite successful, and become the main supplier of Hangzhou Shilan, China, by the end of the third quarter of this year, The average gross profit margin has remained above 40%. At present, the company is also optimistic about the fourth quarter. Since the revenue in October is still high-end, although the revenue will decline in November-December, it is expected that the overall fourth-quarter revenue will decline less than the same industry. The frame is within 10%.
For China's mainland LED market, Xu Shihong said that there are several unique phenomena. First, as long as there is light, there are markets, such as regular squares, large pictures, and pearls. Second, the market demand is contending, and third, the price is floating in three cities. The high-end SideView application is still relatively small in China, but outdoor billboards, lighting and other applications are projects in China where demand growth is relatively fast and the demand is large. The LED requirements in this area are not so high in brightness requirements, and the requirements for relative stability and reliability are higher.
Xu Shihong said that the LED industry in China has developed very fast recently, because many Taiwanese manufacturers and talents and technical resources have entered the mainland of China in these years, and the technology of the LED industry itself is not high. The central government of China has subsidies. The local government has also introduced the LED industry to create a high-tech industrial park, which has caused the scene of LEDs from the upstream extension to the downstream packaging industry blooming everywhere in China.
Taking the upstream as an example, the current industrial distribution of China's LED chip industry is concentrated in the Bohai area, the Yangtze River Delta, the Pearl River Delta, Xiamen, Nanchang, Wuhan and other regions. Among them, Bohai Bay has Dalian Lumei, Beijing Changdian Zhiyuan, Beijing Ruiyuan, Shandong Huaguang, Hebei Huineng, Qingdao Aolong, Beijing Shengkejia, Hebei Lide, Hebei Qingrui, Jining Blu-ray. The Pearl River Delta has Shenzhen Fangda, Hong Kong Puguang, Guangzhou Microtek, Dongguan Gaohui, Shenzhen Orende, Shenzhen Century Jingyuan, Hong Kong Zhen Mingli. In the Yangtze River Delta, there are Shanghai Blu-ray, Shanghai Lanbao, Hangzhou Silan, Shanghai Yuti, Yangzhou Huaxia, Zhenjiang Aolei, and Hangzhou Sea Whale. Others include Jiangxi Foucault, Jiangxi Lianchuang, Jiangxi Jingneng, Xiamen Sanan, Xiamen Ganzhao, Wuhan Diyuan, Wuhan Huacan, Xi'an Zhongwei, Quanzhou Jinglan, Hunan Zengxing Jiaodian and so on.
Xu Shihong believes that the current LED industry advantage in Taiwan lies in the integrity, including the industrial supply chain, technology, the integrity of the yield, etc., but this part of the mainland LED operators are not without the opportunity to catch up as soon as possible. The main reason is China's mainland LED industry national-level basic research and development plan, from MOCVD machines, HVPE equipment, process equipment, single crystal materials to even phosphors, etc., China's mainland intends to do it themselves. Compared with Taiwan, the practitioners have always been alone, and the pocket-deep manufacturers have the resources and resources to do more research and development. The pocket-sized manufacturers often do not wish to face the systematic downturn of the Chinese LED industry in the recession. It has formed a crisis in front of LED practitioners in Taiwan.
When the new century was fully invested in China's mainland market in 2003, the main reason was that the products of the new century were frustrated in the first-tier and second-line large-scale packaging plants in Taiwan. In order to make the company operate smoothly, it decided to move toward the mainland. At present, the business model of the new century in mainland China is mainly through the sale of more reliable local agents.
However, although the scale of China's mainland market is attractive, Xu Shihong emphasizes that China's mainland market is also in danger, and LED practitioners should be very cautious when they travel to mainland China. Analysis of the major risks that have occurred in recent years is nothing more than the issue of accounts and the understanding of local and local cognitive gaps. For example, the problems that are often heard in the local area are not large, and according to experience, they often cause big problems in the future.
On the other hand, the current situation of China's mainland LED market also has the differences in technical cognition between the upper and middle and lower reaches, and the uneven level of peers, including the identification of extension yield, process condition control, packaging technology and environmental control, etc., resulting in LED products. Not only from optical characteristics such as wavelength and brightness, but also to test standards, there are a lot of differences in the quality of the products themselves. In addition, there are often artificially improper manipulations in China's mainland market, which makes the local market's transaction mutual trust base weak, and the mainland manufacturers' normal inventory clearing action is the biggest variable in the mainland market.
On the whole, Xu Shihong believes that China's mainland has already listed the LED industry as a key development industry. Whether it is capital, technology and management capabilities, it is rushing to catch up with LED practitioners in Taiwan. China's mainland is no longer a sub-product or clear inventory of the market. If the Taiwanese manufacturers can cut into the suitable market according to the company's own product characteristics, and have a trade-off in the business model, it is more suitable for the current mainland China market. Change. For example, to assess the rationality and strategic considerations of manufacturing and division of labor, or to separate sales channels and operations, sales through local manufacturers, and so on.
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