Overcapacity hinders the industry's survival of LED companies

In recent years, under the dual stimulation of market environment and government subsidies, the capacity of LED upstream enterprises has continued to expand, and industry competition has become increasingly fierce. Most companies dilute production costs by expanding production scale, in order to lower prices in exchange for market share, resulting in LED chip prices continue to decline. In particular, some LED manufacturers have completed the purchase of machines before the end of the mainland subsidy policy, which has accelerated the release of new capacity of the mainland's new machines, resulting in a worsening of global LED overcapacity.
Under the situation that mainland LED companies generally increase capacity expansion, Jingyuan Optoelectronics, Samsung Electronics, Cree and other companies have made the decision to selectively reduce production to alleviate the current situation of supply and demand imbalance in the LED industry and the pressure of falling prices. It can be seen that overcapacity has become a major obstacle to the development of the LED industry. However, in the face of overcapacity, how do LED companies break through?

M&A integration to enhance competitiveness
The competitive pressure brought by the market downturn has caused many LED companies to set off a wave of integrated mergers and acquisitions. In 2016, there have been more than 10 mergers and acquisitions in the LED industry. On average, more than 3 mergers and acquisitions occurred every month, covering all aspects of the LED industry chain.
M&A integration can make the LED industry develop better. For small enterprises, it is undoubtedly “back to the big trees to enjoy the cool”, and for large enterprises is also a way to expand production capacity at a lower cost and maintain its own market position. LED companies can further expand the scale of enterprises by vertically integrating related enterprises, thereby reducing procurement costs, forming synergies, and improving their competitiveness and industry influence. For example, Huacan Optoelectronics purchased 1.08 billion yuan to acquire 100% equity of Yunnan Lanjing Technology, effectively integrated the production capacity of sapphire substrate of Lanjing Technology, and formed the extension of LED industry chain such as epitaxial chips, chips and terminal applications through the acquisition of Ruijing Optoelectronics. .

Improve the industry system and insist on encouraging innovation
Due to the low barriers to entry in the LED industry, in the past few years, a large influx of capital has occurred, and oversupply, gross margins have fallen sharply at all ends of the industry chain, and many manufacturers are facing losses or even elimination. According to incomplete statistics, there were 4,000 LED companies disappearing in the market in 2015. In 2016, the supply and demand relationship of the LED industry will be eased, and overcapacity will become more apparent. We should give full play to the guiding and restricting functions of planning, policies and standards, strictly enforce access conditions, strengthen industry access management, improve the industry monitoring system and over-capacity warning system, and strengthen and improve industry management.
In the face of overcapacity, lack of industry standards, and uneven quality of products in the entire industry, companies must enhance product innovation while ensuring product quality. At present, many products in the entire LED industry are highly homogenized, and innovative applications are the best choice for enterprises to develop for a long time.
The importance of innovation can be reflected in all aspects of the LED lighting industry. Channel innovation reduces intermediate links and directly opens up the channel between enterprises and consumers, which helps to alleviate overcapacity in the industry; product innovation helps enterprises to jump out of the trap of product homogeneity in the industry; innovation in enterprise management model can help enterprises Going out of the dilemma of rising operating costs; innovations in financing channels, such as the current online financial financing P2P platform, can enable companies to obtain more financing channels. Adhere to encourage innovation, encourage research and development, and apply new technologies, which will help to renew the new vitality of the LED industry.

Increase research and development, from manufacturing to creation
In the case that the market gross margin continues to be squeezed, it is not a long-term solution to achieve competitive advantage through continuous price cuts. In order to cope with price competition, chip companies will dilute costs by cutting epitaxial wafers into more small-sized chips. However, as the chip size is reduced, in order to achieve the same luminous power, it is necessary to increase the injection current and increase the power density of the light, which puts higher requirements on the performance of the LED.
On the one hand, as the power density increases, the luminous efficiency of LEDs decreases, which requires the use of a more superior structure to offset the decline in light efficiency during LED epitaxy. On the other hand, the decrease in LED light efficiency at high power density also means that more heat is generated, which puts higher requirements on the heat dissipation performance and reliability of the LED chip. If the enterprise simply shrinks the chip size without supplementing the supporting extension and chip design and development, it will not only lose the competitiveness of the product, but also cause the product to have super power work, creating potential security risks.
In the context of industry reshuffle, the LED industry will begin to enter “rationality” from the previous “small bee”, and technology research and development has become an important means of enterprise transformation. To this end, companies should be encouraged to increase investment in research and development, increase the content of technology in products, in order to increase the added value of products.
For example, Jingneng Optoelectronics (Jiangxi) Co., Ltd. and China Energy Saving Crystal and Lighting Co., Ltd., together with Nanchang University, won the first prize of National Technology Invention for the “High-efficiency GaN-based Blue Light-Emitting Diode on Silicon Substrate”; The project of “Three-dimensional free optical surface construction for regulating light behavior and its application in semiconductor lighting”, which was completed by Tsinghua University, won the 2014 National Technology Invention Award, etc. These all reflect the importance of enterprises for technology research and development, increase research and development, and build independence. The innovative value chain system of intellectual property rights has made innovation and R&D capabilities the core competitiveness of enterprises, thus achieving “Made in China” to “Created in China”.

Take the high-end product line and develop the market segment
In the face of the increasingly intense LED lighting "Red Sea" market, LED companies should focus on the development of the "blue ocean" in the high-end field by upgrading technology. For example, automotive lighting, smart phone LED-FLASH flash, UV LED, plant lighting special wavelength LED lights and other high-end applications market. For example, Yuanrong Technology acquired Jason Electric, which is dedicated to the field of deep-UV LEDs. Huacan Optoelectronics has also laid out high-margin segmentation fields such as small-pitch display chips and flip-chips, and achieved good results.
In recent years, the price war has caused a sharp drop in profits, and the high demand for the general lighting application market is actually only an illusion. To this end, the LED products produced by the company must not only meet the needs of the existing market segments, but also make technical reserves to meet the needs of future emerging markets, respond to market changes at any time, and provide customers with non-homogeneous products. The product can adapt to the market and can only go in the long run.

Strengthen patent protection and expand overseas markets
The “One Belt, One Road” strategy proposed by the Chinese government provides a favorable policy environment for domestic LED upstream enterprises to “go global”. At present, the domestic LED replacement market is becoming increasingly saturated, LED chip production is overcapacity, small and medium-sized LED enterprises are generally difficult to operate, and emerging markets such as India, Southeast Asia and Russia have entered a period of strong demand for LED lighting replacement. The implementation of the “Belt and Road” strategy will drive infrastructure construction in countries along the route, and LED lighting products will have a broad market by then.
However, most of the current LED core patents are monopolized by international lighting giants. Domestic LED lighting companies “going out” not only need to pay high patent licensing fees to international giants who control core patents, but also face patents that are back in time. litigation. To this end, domestic enterprises need to have intellectual property awareness and use intellectual property as a means of self-protection; government or industry alliances need to guide the domestic LED patent layout at the macro level to help enterprises to specifically supplement patents.
It can be seen that LED enterprises need to strengthen product quality control, improve technical patent reserves, improve after-sales service level, establish corporate brand image, and make China's LEDs illuminate the “Belt and Road” while actively exploring overseas markets.
Summary: LED overcapacity is a double-edged sword, which will not only bring about a series of problems such as “price war” and “corporate bankruptcy”. At the same time, it will also encourage low-end and mid-end enterprises to reshuffle. Some LED enterprises with unqualified quality, weak ability and weak financial strength gradually withdraw from the market, and finally leave a strong and powerful enterprise. Therefore, the development of LED enterprises needs to strengthen their own technology, through continuous reform and innovation, to enhance their own strength, in order to withstand the squally showers.

560nm LED

We are 560nm LED manufacturer from China.

The voltage of lime LED is between 2.0-2.5V. And the brightness level include common bright, super bright and ultra bright.

Ultra bright lime LED isdifferent from those normal green LED, which is have 3.0-3.4 voltage and need to customize.

Same as the white LED, It is the light produced by the blue color chip which is transformed by the special LED fluorescent powder. It does not have a fixed wavelength range and value, which meas lime LED need the coordinate value of X, Y and color temperature to represent it.

We supply variety of 560nm green LED products. Including Through-hole 560nm LED, SMD 560nm LED and high-power 560nm LED. We can also produce 560nm LED according to your requirement.

For the Through-hole Light Emitting Diode 560nm LED,

we can customize the shape, the lighting angle, the number of emitting source, the flat pin LED and braided LED. Such as: 5mm lime 560nm LED, 5mm lime 565nm, 5mm lime 570nm LED, 5mm lime 575nm LED. 3mm lime 560nm LED, 3mm lime 565nm, 3mm lime 570nm LED, 3mm lime 575nm LED.

There are many other shapes for your choose. Customized green LED are available

For the SMD LED 560nm LED,

we can supply dual-chip lime LED, three-chip lime LED, multi-chip lime LED, high voltage LED, flashing lime LED and variety of size SMD LED. For instance: 3528 SMD green 560nm LED, 3528 SMD lime 565nm LED, 3528 SMD lime 570nm LED, 3528 SMD lime 575nm LED. 2835 SMD green 560nm LED, 2835 SMD lime 565nm LED, 2835 SMD lime 570nm LED, 2835 SMD green 575nm LED.

There are also have many other shapes to choose, like the 5050 SMD lime LED, the 5730 SMD lime LED ect. You can choose any one of them for your requirement.

560nm led is a green LED. Common green LEDs are like: lime 560nm LED, lime 565nm LED, lime 570nm led, lime 575nm led and so on.

We will do the High temperature resistance testing and 10 hours ageing treatment before the product out off the factory, which can ensure the stability of each product.

Our LED products have 5 year warranty.

We are the best supplier for your light-emitting diode.

560nm LED, 560nm Yellow LED, 560nm SMD LED, 560nm Green LED

Shenzhen Best LED Opto-electronic Co.,Ltd / BESTSMD CO LIMITED(HK) , https://www.bestsmd.com