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Chinese LED industry, "Great Leap Forward" caused by global overcapacity crisis

This year, the Chinese LED industry to a huge injection of funds directly accelerate the development of the LED industry. The good, China's huge capital investment will help reduce the cost of LED lighting, accelerate the popularization of LED lighting. However, the market worried that the frenzied investment has caused overcapacity. Excess capacity will lead to a series of problems. Which, LED prices will fall, LED manufacturers faced with shrinking profits, LED production equipment company's growth slowed. Conversely, LED competition among enterprises will become increasingly fierce.

LED more energy efficient than incandescent or compact fluorescent lamps. LED lights do not contain toxic mercury, it can be issued more natural light. LED bulbs are expensive, difficult to replace traditional light bulbs. LED market last year reached 10.5 billion US dollars, mainly to the main computer and television backlighting. But by 2020, the global LED market will reach 70 to 10 billion dollars.

In the next few years, the price of LED lighting is expected to fall - there may be up to 90%, so that LED lighting has become a global mainstream lighting solutions.

Tom Morrow, vice president of SEMI company said that at present, electricity for lighting consumes 20% -25% of global electricity. The popularity of LED lighting applications, at least half of the electricity demand can be reduced, energy-saving technology is the most promising.

Tom Morrow said the Chinese central and provincial governments are accelerating the pace of development of LED industry, 2010 - the 2015 will invest $ 17.5 billion to support the development of LED industry. According to SEMI's statistics, 2010-2012, China will fund the construction of 43 LED fabs.

Noble Financial analyst Mark Miller said the production of LED companies too much, the huge increase in investment and production capacity far exceeds demand. End of the year, the market will be at least 30% overcapacity.

Canaccord Genuity analyst Jed Dorsheimer pointed out, LED lighting market to take off at least until 2013. Meanwhile, LED LCD TV market will soon be close to saturation. This year, LED LCD TVs will account for 50% of the LCD TV market in 2012 will reach 75%.

Tom Morrow said, LED manufacturers will have to be adjusted to cope with price plummeted. CREE, Philips, Osram and other corporate giants will be patented as a competitive weapon, limiting the development of Chinese penetration of LED enterprises.

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