Foshan LED companies look to "cooperation" to break through

Recently, several senior domestic experts and representatives of numerous well-known Foshan LED companies gathered at Foshan's first semiconductor lighting industry exchange conference to discuss the path for Foshan's LED industry to break through during this critical period. The reporter learned at the conference that the first "LED Downlight Alliance Standard" released in Foshan last year is expected to become a Guangdong provincial standard. Five major projects in Foshan recently received the second batch of provincial LED industry special support funds, totaling approximately 160 million yuan.

　　Crisis and opportunity—Foshan LED has its advantages

　　This year, for the LED industry, can be described as a mix of crisis and opportunity. Zhang Wansheng, a researcher at the 13th Research Institute of China Electronics Technology Group Corporation, who attended the exchange conference, told reporters that the current development situation of the domestic LED industry is worrying: due to overheated investment, the number of upstream epitaxial chip companies has surged to 85 this year, and it is estimated that next year China's LED chip production capacity will reach 10 times this year's level, with clear signs of overcapacity. Meanwhile, core technology is still in the hands of foreign companies, and domestic companies are not competitive.

　　The midstream packaging segment has shown signs of overcapacity in the past two years, with competition now heading toward a white-hot stage; downstream applications face high product homogeneity and continuously declining profits. In addition, factors such as a poor global economic environment, soaring costs, a lack of industry standards for products, and ineffective promotion channels have also greatly hindered the development of the LED industry. Zhang Wansheng predicts that in the future perhaps only one-third of chip companies will remain, and 90% of packaging companies will face survival pressure.

　　However, as incandescent light bulbs gradually "retire from the scene," more energy-efficient and environmentally friendly LED lighting products are expected to usher in a "great leap forward." Huang Qifeng, deputy director of the Municipal Science and Technology Bureau, believes that after several years of development, Foshan's lighting industry has accumulated a solid foundation with stable market development, and the government has spared no effort in policy guidance and support, giving it greater advantages during this "critical turning point."

　　It is reported that currently 80% of Foshan's traditional lighting companies have ventured into the emerging LED industry, with over 300 companies in total, including 5 listed companies such as Osram, Foshan Lighting, Nationstar, Xuelaite, and Midea Lighting, as well as well-known LED enterprises such as Kaixiou, Blue Arrow, and Zhaoxin. Among them, there are 4 upstream chip companies, more than 20 midstream packaging companies, and the rest are all downstream application companies.

　　Corporate Cooperation: Needs and Challenges

　　At the exchange meeting, many corporate executives mentioned the word "cooperation." Wu Yulin, president of the Foshan Lighting and Lamps Association, believes that cooperation is very beneficial for the Foshan LED industry to break through. "Large companies have capital, brands, and channels, while small companies of a certain scale have production capacity and technology, and quality is also guaranteed. Through cooperation, both sides can capture a larger market share. Currently, the association is planning to establish an industry alliance to build a cooperation platform for enterprises," said Luo Jijun, manager of the LED Division of Blue Arrow Electronics. He also admitted that during peak order times, they need to find OEM companies for support. However, his attitude toward such cooperation is relatively cautious. "Cooperation requires a period of adjustment and, more importantly, mutual trust. It can't be achieved just by meeting a few times and chatting."

　　When discussing the future development direction of LED products, more enterprises and experts tend to favor the indoor market. It is understood that this year Chancheng District became one of the first batch of 'Green Lighting Demonstration Cities' and launched the province's first 'Ten Thousand Households, Hundred Million Lamps' indoor green lighting demonstration project, planning to promote more than 100,000 LED indoor lighting units, which will bring an output value of over 5 billion yuan. However, the standard issue is currently the biggest obstacle to the development of the LED industry and LED products 'entering homes'.

　　According to the association, as early as the end of last year, Foshan released the first 'LED Downlight Alliance Standard', and currently, this 'Alliance Standard' initiated by the Municipal Institute of Standard Technology, the Municipal Lighting and Lamps Association, and Sun Yat-sen University Foshan Research Institute, with the joint participation of 7 leading LED enterprises including Nationstar Optoelectronics, Lanjian Electronics, and Kaixiou Lighting, is expected to be promoted to a Guangdong Province standard, becoming a 'Local Standard', filling a gap in the industry. It is understood that downlights are widely used in indoor spaces such as homes, offices, entertainment venues, and conference rooms, and Foshan is one of the largest LED downlight production bases in the country.