Mainland LED companies go it alone is not conducive to the overall development of the industry

Recently, China's LED companies have risen rapidly. Although the amount of investment has been astonishing, the hidden concerns have also drawn attention. Most of the more than 3,000 LED companies in the mainland are downstream of the industrial chain, and they are inferior to foreign manufacturers in technology patents. In the face of external intervention, local companies are still fighting alone and fear of negative impact in the future.

On the other hand, there are as many as 13 LED industry bases on the mainland, and problems that were originally hidden under the countertops have gradually emerged, such as the homogeneity of industrial structures and core technical defects.

At the 2011 China International LED Industry Technology Exhibition and Forum, experts said that the mainland's LED industry and other new energy industries are exactly the same, and their development is rapid and rapid, but at the same time, they also have the hidden worry of overcapacity.

The mainland’s investment in the LED industry is alarming. The analysis report of the Shanghai Semiconductor Lighting Engineering Technology Research Center pointed out that the LED industry in mainland China will have a scale of RMB 120 billion in 2010. The statistics of the LED Industry Research Institute of Gaogong also indicated that in 2010, the amount of investment in the mainland LED industry signing program was as high as RMB 217.8 billion, and by the end of 2010, new projects had completed a total investment of RMB 34.3 billion.

However, behind the growth in investment in the LED industry, there are many disadvantages that have not been noticed before. More than 3,000 LED companies in the mainland are mostly in the downstream of the packaging or industrial chain. However, due to the lack of technical background in key substrate material technology and epitaxial wafer production core equipment, technology patents have long been monopolized by foreign manufacturers. Can only rely on imports, lost the fundamental price advantage.

What is even more crucial is that in the face of continuous offensives by foreign companies, mainland Chinese companies have not cooperated with each other, but have chosen to go it alone. In order to promote the transformation of local enterprises, some local governments have introduced a number of supporting policies, such as procurement equipment subsidies, tax incentives, and preferential use of local companies for local demonstration projects. Although the intention of local governments is good, they in fact prevent other regional companies from trans-regional integration and market development.

If the LED industry wants to become a mature and sound industry, vertical integration across regions should be a must. At present, the current status of LED companies in mainland China scattered around and their respective administrations may be of limited help to the development of the overall industry.