LED packaging companies cross the market to share downstream market share

In recent days, LED packaging companies have been paying attention to the price hikes. Some people in the industry pointed out that from the perspective of supply, the original price of LED package itself is close to the material cost, which causes huge cost pressure for enterprises, and passes the cost downstream or It is a strategy. However, the cost of passing on is not a long-term solution.

According to industry insiders, there will be fewer and fewer companies that will simply do LED packaging in the future! Some LED packaging companies will gradually extend to the downstream market and share the downstream market share.

1. LED packaging market competition, white-hot enterprises find another way out

Due to the increasing penetration rate of LED application market, most international LED packaging manufacturers are optimistic about China's domestic application market, and have set up production bases in China. Under the adjustment economy, market demand has slowed down, and the phenomenon of oversupply has become more apparent. The competition for white-hot competition has directly led to the price of international LED packaging manufacturers falling by more than 20%. The prices of domestic packaging enterprises are almost swaying, and the industry growth rate is slowing down. The data shows that the scale of China's LED packaging industry is expected to reach 64.2 billion yuan in 2015, a year-on-year increase of 13%, and the growth rate is 7.1 percentage points lower than that in 2014.

At the same time, the “defective” situation of LED packaging has also affected its development. As we all know, packaging, as a link between the upstream and downstream, is greatly affected when the market is not good, and when the market improves, it will be subject to insufficient supply of chips, and the downstream will continue to demand double cost reduction, plus the entire domestic and foreign Under the competitive pressure in the big environment, the development of packaging manufacturers has become difficult, resulting in some packaging plants gradually extending downstream.

In the past few years, many LED packaging companies have rapidly expanded to the upstream and downstream industry chains through acquisitions and other means. For example, Hongli Optoelectronics completed the acquisition of the remaining equity of Fo Da Signal, Ruifeng Optoelectronics merged Lingtao Optoelectronics into the small and medium size backlight market and Guoxing Optoelectronics to restructure Xu Rui Optoelectronics and other large cases.

But mergers and acquisitions are not the only means for packaging companies to cut into the downstream application market. It is reported that LED packaging companies intend to cut into the downstream market directly, and divide the LED display market.

2. Take advantage of the package itself or seize the small pitch market

In the past year, the LED downstream application market has also been “screaming for the sky”, so what is the market for LED packaging companies to want to share?

As we all know, in the LED downstream application market, LED lighting was once a fertile soil, but as early as 2014, the Chinese market, from the packaging, spoiler downstream lighting applications appeared. Among the companies that are listed on the LED packaging business as their main business, the main LED lighting business is Guoxing Optoelectronics, Hongli Optoelectronics, Wanrun Technology, and Changfang Lighting, which are now in full swing. The traditional lighting business has been divided, and other LED packaging manufacturers want to innovate in the already established field, it seems not realistic.

In contrast, the market for LED displays is clearly more attractive. According to statistics, in 2014, the global LED display (including display screens and other backlight products) has reached a market size of 9.6 billion US dollars. According to forecasts, the global LED display market demand will continue to grow rapidly in the future. The annual growth rate will exceed 20%. It is estimated that by 2020, the global LED display market will reach 30 billion US dollars. LED packaging companies to develop new business is looking at its future market prospects and existing space, it is clear that the LED display market just meets these requirements.

However, we have to face up to the point that the current LED display market is basically shaped, and traditional LED display products tend to be saturated. At this time, LED packaging companies need to take advantage of their own cuts.

From the application level, with the development of small spacing, the current LED display market is in a state of “seeking more than supply”. And because the indoor and outdoor small spacing is more dense, the market demand for lamp beads is increasing. As a company that masters LED packaging technology, it can guarantee the supply of raw materials and cost control by using the small-pitch market, and use its own advantages to produce relatively low-cost products with reasonable price, which will also be the original Display companies bring even greater impact.

3. Bifurcation shows that the market is bound to cause "squid effect"

Once a packaging company enters the downstream market, it is bound to cause a "squid effect." Professional packaging companies use the power of the capital market or the technology and channel advantages of the company to achieve rapid development. The original LED display companies will form a strong competition with the packaging companies. LED packaging companies can use their superior technology to produce high quality and low price products, and automatically eliminate inferior manufacturers.

Although after a period of industry integration, a considerable number of unqualified manufacturers have been screened out, there are still some inferior products on the market, and the entry of the packaging industry will occupy the market space of these unqualified manufacturers.

In addition, as LED packaging companies enter the display market, they will force manufacturers of LED displays to segment the market and develop new areas. LED packaging companies in the industry chain to open up, have an absolute advantage in grasping the details of the product. After the packaging enterprise is involved in the downstream industry, the original LED display manufacturers will strive to maintain the original advantages, and develop the characteristic business that the packaging enterprise can not immediately penetrate, and create business barriers for it.

At the same time, the involvement of packaging companies will promote the development of new products on LED screens. In the increasingly competitive market environment, the LED display industry will continue to enhance its technological innovation strength and seek breakthroughs through innovative products. Gradually formed a pattern of product varieties and specifications. And in the field of product applications will continue to expand, from the traditional use of public squares, transportation, corporate image promotion, commercial advertising, airports, railway stations, highways, subways, etc. to use in intelligent transportation systems, logistics systems, etc. .

All in all, LED packaging companies entering the downstream display market will undoubtedly bring certain competitive impact, but will also urge the original LED display companies to continue to improve, and the enterprises that have been eliminated will not be in the development of the LED display industry. Avoided.

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