[Source: Gaogong LED's "LED Research Review" magazine February issue Reporter / Zhao Hui] With the crazy investment in the LED industry a few years ago, the upstream epitaxial chip capacity continues to expand, and chip prices continue to fall. The days of packaging companies in the middle of the industry are slowly becoming less and less. The price war has made the high-margin era of the packaging industry go away. Most companies can only maintain normal gross profit levels.
According to statistics from the High-Tech LED Industry Research Institute (GLII), the LED packaging industry in mainland China reached 39.7 billion yuan in 2012, an increase of 24% from the 32 billion yuan in 2011. In 2012, the number of companies involved in LED packaging in mainland China increased from 1,700 in 2011 to 1,750. In 2012, more than 200 LED packaging companies were eliminated in China, and more than 250 new companies involved in LED packaging.
In 2012, the financial report data released by several domestic LED packaging listed companies showed that the industry began to enter the era of low gross profit, and the increase in profits did not become a common problem in the current packaging industry.
In 2012, the price of packaged devices dropped rapidly, and the average price of white-light packaged devices dropped by more than 30%, which prompted packaging companies to develop products with high profit margins and strong demand in application fields.
The pursuit of high-margin packaging products, while using low-cost production processes has become the focus of competition for LED packaging companies. High-power COB package has been favored by many companies with its high profit level and potential market prospects, and it is unique in the slightly bleak packaging market.
High-power integrated package is popular
As the LED market matures, downstream applications are increasingly demanding the stability, reliability, and low cost of LED packaged devices. Compared with traditional in-line and SMD packages, the COB package can directly package multiple chips on a metal-based printed circuit board, and directly dissipate heat through the substrate, which not only reduces the manufacturing process and cost of the bracket, but also reduces the cost. Thermal resistance of thermal resistance.
“The production cost of high-power COB package is relatively low, the heat dissipation effect is gradually improved, the light output density is high, and it is easy for downstream application manufacturers to carry out individualized design.†Ye Mao, general manager of Shenzhen Yiliang Photoelectricity, told the “High-tech LED†reporter. Since the second half of last year, high-power integrated package products have become very popular in the market and are also their main products.
Huang Lumin, manager of Shenzhen Zhongjing Kechuang Optoelectronics Technology Department, said that the COB package can effectively avoid the disadvantages such as spot light and glare in the combination of discrete light source devices. It can also be added to the appropriate red chip combination without reducing the efficiency and life of the light source. The utility model can effectively improve the color rendering of the light source; at the same time, it can help realize the reasonable configuration of the LED chip and reduce the input current of the single chip to ensure high efficiency.
Lin Jin, general manager of Shenzhen Xuyu Optoelectronics Co., Ltd., who has tasted the sweetness of the market, filled with confidence: “The sales volume of Zhongda Power COB light source has increased greatly last year, and the gross profit margin has remained at a good level. This year we will increase the relevant production capacity."
Competitive differentiation
Faced with the fierce competition in the packaging market, how to survive the winter before the arrival of spring and survive, has become a difficult problem for various packaging companies. Differentiating competition and occupying high-margin segmentation have become the best choice for many companies.
“At present, the low gross profit of the packaging industry is mainly due to the continuous release of packaging capacity in recent years. There are hundreds of new packaging companies entering each year, but another important reason is that most packaging companies have the same product quality. Seriously, they are concentrated on small and medium-sized power devices, resulting in fierce competition and mutual price hikes.†Lin Jin fill told the “High-tech LED†reporter that the competition in the LED industry is becoming increasingly fierce, especially the gross profit of traditional packaging products is declining, which requires Enterprises can continuously improve their core competitiveness and differentiate their products in order to expand their influence in the market, thus ensuring the same growth of income and profits.
At present, the market pressure of the packaging industry is getting bigger and bigger, and the price competition has become more and more intense. In order to cope with competition, enterprises must make appropriate adjustments in product structure, cost control and technical processes.
“Although the gross profit of the package is declining, the demand in some market segments is still increasing. As long as we seize these opportunities and make good products, we will have great competitiveness.†Zhejiang Yingtelai Optoelectronics General Manager Zhang Macro said.
In order to cope with the fierce competition in the packaging market, many packaging factories began to expand to the upstream and downstream of the industry. The packaging factory headed by Guoxing Optoelectronics began to enter the upstream epitaxial chip field, while the company headed by Hongli Optoelectronics focused on the downstream application field. Through industry chain expansion, reduce costs and maintain profitability.
“The whole industry chain has the cost and product advantages brought by its upstream and downstream integration, but blindly enters the downstream application industry, there are still problems brought by many aspects such as technology and channels, and it will also have a competitive relationship with previous customers.†Luo Jing, vice president of marketing of Zhongzhou Optoelectronics, stressed that when doing downstream lighting products, the company should try to choose what customers have not done yet, and try to be differentiated and fully complement the original customers.
Industry shuffling soon
Packaging has always been an important part of connecting the upstream LED epitaxial chip and downstream application market, and it is also an important link for upstream epitaxial and chip market protection. At the same time, the performance of packaged devices is also a key factor to measure the quality of downstream application products.
In recent years, the LED packaging market in mainland China has developed particularly rapidly, and the number of enterprises has been increasing, but packaging has become the most intense part of the entire LED industry chain.
In the past two years, China's Taiwanese packaging companies have also begun to actively deploy on the mainland. The mainland LED packaging enterprises that were originally in the middle and low end, with serious homogenization and large price wars will face greater challenges.
At present, China's packaging companies still dominate the low-end market, relying on price wars to maintain the original market share. The high-end products are basically occupied by Taiwanese and foreign-funded manufacturers.
Dr. Zhang Xiaofei, CEO of Gaogong LED, said that the low-margin and disorderly competition in the packaging industry has seriously hindered the healthy development of the industry and is not sustainable. The reshuffle integration of the packaging industry is imperative. “Only those leading companies in the segment with scale advantages or featured products can survive this wave of integration.â€
According to statistics from the High-Tech LED Industry Research Institute (GLII), the LED packaging industry in mainland China reached 39.7 billion yuan in 2012, an increase of 24% from the 32 billion yuan in 2011. In 2012, the number of companies involved in LED packaging in mainland China increased from 1,700 in 2011 to 1,750. In 2012, more than 200 LED packaging companies were eliminated in China, and more than 250 new companies involved in LED packaging.
In 2012, the financial report data released by several domestic LED packaging listed companies showed that the industry began to enter the era of low gross profit, and the increase in profits did not become a common problem in the current packaging industry.
In 2012, the price of packaged devices dropped rapidly, and the average price of white-light packaged devices dropped by more than 30%, which prompted packaging companies to develop products with high profit margins and strong demand in application fields.
The pursuit of high-margin packaging products, while using low-cost production processes has become the focus of competition for LED packaging companies. High-power COB package has been favored by many companies with its high profit level and potential market prospects, and it is unique in the slightly bleak packaging market.
High-power integrated package is popular
As the LED market matures, downstream applications are increasingly demanding the stability, reliability, and low cost of LED packaged devices. Compared with traditional in-line and SMD packages, the COB package can directly package multiple chips on a metal-based printed circuit board, and directly dissipate heat through the substrate, which not only reduces the manufacturing process and cost of the bracket, but also reduces the cost. Thermal resistance of thermal resistance.
“The production cost of high-power COB package is relatively low, the heat dissipation effect is gradually improved, the light output density is high, and it is easy for downstream application manufacturers to carry out individualized design.†Ye Mao, general manager of Shenzhen Yiliang Photoelectricity, told the “High-tech LED†reporter. Since the second half of last year, high-power integrated package products have become very popular in the market and are also their main products.
Huang Lumin, manager of Shenzhen Zhongjing Kechuang Optoelectronics Technology Department, said that the COB package can effectively avoid the disadvantages such as spot light and glare in the combination of discrete light source devices. It can also be added to the appropriate red chip combination without reducing the efficiency and life of the light source. The utility model can effectively improve the color rendering of the light source; at the same time, it can help realize the reasonable configuration of the LED chip and reduce the input current of the single chip to ensure high efficiency.
Lin Jin, general manager of Shenzhen Xuyu Optoelectronics Co., Ltd., who has tasted the sweetness of the market, filled with confidence: “The sales volume of Zhongda Power COB light source has increased greatly last year, and the gross profit margin has remained at a good level. This year we will increase the relevant production capacity."
Competitive differentiation
Faced with the fierce competition in the packaging market, how to survive the winter before the arrival of spring and survive, has become a difficult problem for various packaging companies. Differentiating competition and occupying high-margin segmentation have become the best choice for many companies.
“At present, the low gross profit of the packaging industry is mainly due to the continuous release of packaging capacity in recent years. There are hundreds of new packaging companies entering each year, but another important reason is that most packaging companies have the same product quality. Seriously, they are concentrated on small and medium-sized power devices, resulting in fierce competition and mutual price hikes.†Lin Jin fill told the “High-tech LED†reporter that the competition in the LED industry is becoming increasingly fierce, especially the gross profit of traditional packaging products is declining, which requires Enterprises can continuously improve their core competitiveness and differentiate their products in order to expand their influence in the market, thus ensuring the same growth of income and profits.
At present, the market pressure of the packaging industry is getting bigger and bigger, and the price competition has become more and more intense. In order to cope with competition, enterprises must make appropriate adjustments in product structure, cost control and technical processes.
“Although the gross profit of the package is declining, the demand in some market segments is still increasing. As long as we seize these opportunities and make good products, we will have great competitiveness.†Zhejiang Yingtelai Optoelectronics General Manager Zhang Macro said.
In order to cope with the fierce competition in the packaging market, many packaging factories began to expand to the upstream and downstream of the industry. The packaging factory headed by Guoxing Optoelectronics began to enter the upstream epitaxial chip field, while the company headed by Hongli Optoelectronics focused on the downstream application field. Through industry chain expansion, reduce costs and maintain profitability.
“The whole industry chain has the cost and product advantages brought by its upstream and downstream integration, but blindly enters the downstream application industry, there are still problems brought by many aspects such as technology and channels, and it will also have a competitive relationship with previous customers.†Luo Jing, vice president of marketing of Zhongzhou Optoelectronics, stressed that when doing downstream lighting products, the company should try to choose what customers have not done yet, and try to be differentiated and fully complement the original customers.
Industry shuffling soon
Packaging has always been an important part of connecting the upstream LED epitaxial chip and downstream application market, and it is also an important link for upstream epitaxial and chip market protection. At the same time, the performance of packaged devices is also a key factor to measure the quality of downstream application products.
In recent years, the LED packaging market in mainland China has developed particularly rapidly, and the number of enterprises has been increasing, but packaging has become the most intense part of the entire LED industry chain.
In the past two years, China's Taiwanese packaging companies have also begun to actively deploy on the mainland. The mainland LED packaging enterprises that were originally in the middle and low end, with serious homogenization and large price wars will face greater challenges.
At present, China's packaging companies still dominate the low-end market, relying on price wars to maintain the original market share. The high-end products are basically occupied by Taiwanese and foreign-funded manufacturers.
Dr. Zhang Xiaofei, CEO of Gaogong LED, said that the low-margin and disorderly competition in the packaging industry has seriously hindered the healthy development of the industry and is not sustainable. The reshuffle integration of the packaging industry is imperative. “Only those leading companies in the segment with scale advantages or featured products can survive this wave of integration.â€
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