LED industry can not rely on government subsidies alone

In February of this year, the National Development and Reform Commission and other six ministries and commissions jointly issued the “Semiconductor Lighting Energy-saving Industry Plan”, which intensified the financial subsidies for the promotion of LED lighting products. In commercial lighting, industrial lighting and government offices, public lighting and other fields, focus on LED downlights, spotlights and other indoor lighting products and systems of demonstration applications and promotion, timely access to home lighting. In the field of outdoor lighting, we will focus on demonstration applications of LED tunnel lights, street lamps and other products and systems. The bulb lamp was also included in the subsidy for the first time. Subsequently, in April of this year, the "12th Five-Year Plan for Energy Saving and Emission Reduction in Jiangxi Province" was promulgated, requiring all public agencies to use high-efficiency lighting fixtures in 2015; in May, Fujian Province issued "Some of the Promotion and Application of LED Lighting Products in Fujian Province Measures, clearly to achieve the general use of LED lighting products in the public lighting field before the end of 2015, the province to achieve more than 50% energy saving than the same period. What impact does the state's subsidies have on the LED industry? How is the relationship between industry development and national policy subsidies balanced? With these questions, recently China Economic Herald reporter interviewed Liang Rongqing, director of the Institute of Electric Light Sources at Fudan University.

Higher prices have not yet fully opened the China Economic Herald: Please tell us about the current status of China's LED industry.

Liang Rongqing: Because of its various advantages, such as energy saving, LED is 6 times the energy saving rate of incandescent lamps, and it is constantly improving in the process of innovation and development. It is entirely possible to replace traditional lighting, so the development speed is very fast.

However, there are also problems in the rapid development. First of all, the price is relatively expensive, people think that the cost performance does not achieve the desired effect, making the LED industry sales market has not yet fully opened, the current market share is relatively low. Secondly, existing light sources, such as energy-saving lamps and fluorescent lamps, are capable of satisfying lighting requirements. Therefore, LEDs cannot completely replace existing light sources in a short period of time. The market application requires a long process, resulting in excess capacity in China's industrial enterprises. situation. In recent years, the development of the LED industry from the "applause" to a slight improvement this year, the market has undergone major changes, while some experts predict that 2016 will usher in the peak of the industry development. The pace of LED industry development is irresistible.

SMEs face the survival of the fittest China Economic Herald: As the LED industry entry threshold is low, as the market picks up, many capital inflows, downstream gathered a lot of low-end production capacity. If you do not control it, there will be a danger of surplus after a large expansion of production capacity. By then, the industry may face the impact of disorderly competition from SMEs. Do you think the LED industry is likely to become the next photovoltaic industry?

Liang Rongqing: The LED industry and the photovoltaic industry are completely different. Photovoltaic industry as a supplement to energy, the density of energy is very low, will not affect our lives too much. However, lighting is an indispensable device in our daily life, and its energy-saving and emission-reducing effect is also significantly greater than that of the photovoltaic industry. A good light source saves the country's energy resources very clearly and immediately. We have far more demand for LEDs than photovoltaics. To give a simple example, LED is like the replacement of mobile phones, Iphone5 replaced Iphone4, and PV is holding IPAD in hand, but also want a feeling of IPOD.

China Economic Herald: What problems do you think SMEs will face during the development process? What is the direction of development?

Liang Rongqing: Starting last year, many countries and regions such as Europe, the United States, Japan, and Korea have increased the import threshold for imported directional lights and LED lighting products, and the low-end products that target exports have finally escaped the fate of being eliminated. As domestic consumers increase their awareness of LED lighting products, their technical content and quality requirements will also increase, and low-end productivity will hardly be feasible by relying on low-cost survival methods.

The SME procurement components are assembled and the inferior products produced are much lower in price than other high-quality products. Generally, they do not have any difference in appearance. Only after a long period of use can they feel the difference in quality. With the improvement of the quality of life, people’s ability to discriminate is gradually enhanced, and the demand for brands is also increasing. If SMEs do not have their own technologies, there is no guarantee that brand assurance will be difficult and it will be difficult to maintain them for a long time. Will be eliminated. However, in China, there are consumers of this demand, so they have the space and conditions for survival. The state encourages enterprises to become bigger and stronger. By 2015, there will be 10 to 15 giant companies. In this process, the fittest will survive and survive. However, this process will take some time. It will not be possible within a short period of time to achieve the establishment of a large brand and the closure of SMEs, because China is more complicated than any other country in the world.

China Economic Herald: Many leading LED industry companies in China, such as Sanan Optoelectronics, according to statistics more than half of corporate profits in 2012 from government subsidies, do you think this phenomenon is reasonable? Will this affect the construction of independent innovation capabilities?

Liang Rongqing: Government subsidies are not a permanent solution. Enterprises need government's pull at the beginning of development, but in the end they still need their own capabilities. For example, if a person is sick, he will take drugs by injection in the early stages, but he will eventually rely on his own resistance to recover. Any company hopes to receive subsidies from the state, but if it only depends on subsidies, then the development of the company will not be optimistic. Businesses must turn flammability into spontaneous combustion.

Government subsidies will affect the ability of enterprises to independently innovate, and they have both advantages and disadvantages. The disadvantage is that some companies do not really use the government-subsidized funds to build independent innovation capabilities. However, most companies still subsidy funds provided by the state and even the financial resources, material resources, and manpower that they are able to win are used in the research and development of products, and they have added good management during the later period, which has made the company bigger and stronger. In general, government subsidies have played a positive role.

China Economic Herald: It has been reported that the government’s support for the LED industry should be more inclined to the middle and lower reaches, because if the end market performs well, it will directly drive the sales of upstream and upstream products, and it will also ease the pressure on the upstream overcapacity crisis and inventory. . Do you agree with this view? How do you think there should be a good balance between industry development and national policies?

Liang Rongqing: I agree. The middle and lower reaches of the industry are crucial. How LEDs are applied and how they are applied are key issues. LED is not made into a light so simple, it also involves science, technology and other aspects of the content, including some new types of lamps, combined with the characteristics of LED, so that our future life lighting more colorful. Therefore, government support for the industry should be more inclined to the midstream and downstream end markets.

I think that in a period of time, the national government can give policy support, but if you always rely on national policy, it is hard to be independent. A new industry can drive the economy of the entire country, and it can also improve the employment situation of the country. Therefore, the country's investment should receive a positive return, and which companies are more important.