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Significant signs of industry recovery
According to the statistics of the High-tech LED Industry Research Institute, there are more than 5,000 LED companies in China, including more than 1,000 packaging companies. The competition in the middle and lower reaches is fierce. The number of domestic production enterprises of upstream chips is small, and the chips of middle and downstream enterprises are still mainly imported.
Judging from the operating data of listed companies last year, due to the poor macroeconomic environment, the competition for homogenization of enterprises is serious. Under the “pinch†of falling product prices and rising costs, most of the middle and lower reaches are in the second half of last year, except for some upstream enterprises. The performance has shown a downward trend, especially in the third quarter.
In the field of LED downstream applications, even real estate regulation has an impact on its market. A person in charge of a listed LED company said: "Due to the cooling of real estate, our LED display business was obviously affected in the construction field last year. Fortunately, in the field of cultural media, our annual report will be difficult to read."
The second half of last year was the toughest period for the LED industry. Among them, some small-scale enterprises were eliminated and closed down. However, this situation has suddenly changed since this year. "This year, especially in March and April, we obviously feel that the industry boom has rebounded." An LED packaging company executive told reporters: "Our current orders will not be completed until June. The company plans to accelerate the expansion of its subsidiaries' capacity. The equipment is in place."
In fact, the Taiwan LED industry showed signs of recovery early this year. Since mainland packaging and application vendors' chips are mostly from Taiwanese manufacturers, this demand from mainland manufacturers began to be transmitted to Taiwanese manufacturers at the end of last year.
LED ushered in the policy "Dawn"
From the application field, the terminal products of LED enterprises are mainly export-oriented, and domestic applications are mainly based on backlight and display, and lighting applications have not yet started.
From the perspective of various market segments, the high-growth stage of LED backlights for displays and LCD TVs has passed; there are numerous companies in the field of display applications, the competition for homogenization is serious, and the profit margin of enterprises is constantly compressed. There is a huge LED market in the field of civil lighting and public lighting. However, the high price of LED lighting products has become an important obstacle to widespread implementation.
"The reason for the high price of LED lamps is because the production scale is not enough, and the overall cost cannot be reduced." An LED manufacturing company owner said that although there are many companies producing LED lamps, the sales volume is not large, which is also decided. Everyone has no bargaining power for the purchase of upstream chips, and the output is small, and the production scale effect does not come out.
"Currently, effective ways to solve these problems still need to be driven by policies." A LED industry researcher said that Japan is one of the first countries in the world to announce the ban on incandescent lamps, and is currently the fastest growing region for LED lighting. The subsidy and incentive policy is considered to be an important driving force behind it.
Last November, China also announced the exit plan for incandescent lamps. Since the beginning of this year, the relevant departments have issued a series of subsidy policies for LED lighting and energy-saving television. In addition, some eligible provinces have introduced local support policies for LED lighting applications. 
Supporting policies continue to ferment, the LED industry is showing signs of recovery
In the context of the global economic adjustment, the LED industry is also unable to protect itself. Although some companies said that after the difficult years in the second half of last year, the signs of industry recovery this year are obvious. However, as competition for homogenization intensifies, product prices fall further, and costs increase, the concentration of LED industry will further increase in the future. Only some leading enterprises will win in the “adversityâ€.