Subsidies may give power to LED lighting companies

In 2009, the Yangzhou City Government of Jiangsu Province launched the MOCVD subsidy policy, which has led other Chinese local governments to follow suit. The country has set off a wave of investment in LED epitaxial factories. This matter is still vivid. It is reported that a MOCVD machine in Yangzhou has a financial subsidy of 10 million yuan. This policy is a temptation for LED companies, and Yangzhou is subsidizing it "innovatively," with a cash payment method. 50% of the amount, 30% during the pilot production period, and the final 20% of the final payment for the subsidy after the acceptance period of mass production. Therefore, a number of LED epitaxial wafer manufacturers, such as Haoyuan Optoelectronics, Lanbao Optoelectronics, Zhenmingli, and Longyao Optoelectronics, have been attracted to Yangzhou. However, this favorable policy has led to a growing number of companies that rely on subsidies to survive. In July 2011, the subsidies for Yangzhou City came to an end.

There is a certain truth in the argument that relying on subsidy can feed a company. It is well-known that government subsidies are somewhat "dirty." "The grapes that cannot be eaten are sour," and many LED companies that have not received subsidies have begun to wonder. After getting the subsidy, did those companies conduct R&D and expansion or become "zero money" themselves? This is not known. LED development so far, the introduction of policy subsidies one by one, from upstream equipment to downstream application procurement readily available. If the huge financial subsidy policy is terminated, what kind of situation will the subsidized enterprise be facing? What is certain is that the profitability of some companies after losing subsidies is worrying.

It is understood that Guangdong Province has established an industrial development fund of 2 billion yuan; Shenzhen has provided a 10% subsidy to the companies participating in government-invested LED demonstration projects and subsidized interest rates for three years. The engineering company will provide subsidies for 30% of the price of LED lamps. So Guangdong LED companies quickly launched, the traditional lighting companies almost all turned into the LED industry. It can be seen how amazing the power of government subsidies is. Of course, financial subsidies have accelerated the development of the LED industry without a doubt, and LED lighting prices are getting closer and closer to the "civilian price."

In fact, the current government subsidy program is an important guarantee for the profitability of LED companies. Once the government stops providing financial subsidies, these LED companies cannot effectively cope with the current profitability. The LED industry relies on policy promotion to a certain extent, among which the financial support has the highest efficiency. The LED companies with larger subsidies will develop better, but once they lose their support, the subsidized LED companies will start shrinking. Isn't this similar to the situation where "addicts" need opium? Companies that have not received subsidies have said that small businesses are already self-reliant, and policy subsidies do not have much impact on their help. Fiscal subsidies have been “unselfish” and have been drastically undermined, leaving the LED industry with a cold market and hot industry. Subsidizing such subsidies blindly will sooner or later exhaust the financial resources of local governments. So, is the government subsidy "to give wrong power"?

Usually, the government subsidizes bidding, LED lighting companies will first benefit, and subsequent packaging and chip manufacturers will also receive collateral effects. Those who receive policy subsidies are all large companies. Investment in large-scale and powerful companies is the most secure approach. Investment is risky. Of course, the most stable company should be selected as the investment target. However, the LED industry is an emerging industry, and few companies can be described as "old brands." Because of this, small businesses dare to dare to rush and have a lot of room for development. Unfortunately, these "potential shares" have not been favored by the government. The polarization of the LED industry is serious, and one of the reasons is that government subsidies “blindness”.

The subsidized LED companies certainly enjoy the scenery and feel that the government should continue to subsidize different projects in the industry. Those companies that are not subsidized can only look at the portion of the subsidy that is dispensable to them. The reporter believes that there is nothing wrong with government subsidies, but there are problems with the route of choice. For example, under the guidance of the government in the past few years, most of the first wave companies produced LED street lamps. At that time, LED street lamp application promotion was the earliest and largest in the world. How can the quality of LED street lights at that time be clear to everyone? This blind subsidy is the first, but not the last one. The slogan “Looking for the market, looking for the mayor” became popular at the moment and the government strongly supported the LED industry. However, due to the immature technical conditions, the products could not be promoted to a larger market. Finally, government procurement has become the only sales channel for LED companies. Isn't this guiding the LED industry to a dead end?

The reporter suggested that policy subsidies should be "people-oriented" and take consumers to purchase LED lights for corresponding subsidies, so that high-priced LED lights can gradually be accepted by consumers. However, the government must learn from the Huimin subsidy for energy-saving lamps earlier, because the citizen’s consciousness is not in place, and the subsidy policy “cold.” Citizens do not know where to buy, do not know where to go for consultation, making energy-saving lamps "in the depths of the people did not know." The current LED renovation project has greatly deepened people's awareness of energy conservation. For example, citizens must purchase LED lights for corresponding subsidies, and the procurement and consultation sites must be complete in order to speed up the speed of LED adoption.