Li Bingjie: Epistar OEM business and the Epistar basically does not exist a competitive relationship. With the rapid development of semiconductor lighting products, industry environment has begun to change at present. Many international enterprises are committed to the vertical integration. Their value achievement is to take the while industry chain into consideration, focusing on the development of its own core strengths. For some high-volume sales and standardized production of LED lamps, When LED lights chips is provided by such Epistar, professional LED chip suppliers, the provision of these enterprises will not tend to put into a great deal of money in the chip production. These international enterprises will put the chip production orders to the professional chip suppliers because the core value of their products is very difficult to reflect on the chip level. The Chip enterprise can either sell their chip to this enterprises or can also be sole to other companies. Only their own resources invested in the aspects which superior to others and do other aspects of the products well, and form their unique value, that is the way to win. If he only persists in the chip field investment, it cannot reflect the product advantages, but because their own production of the chip, while the competitors do OEM by Epistar, they will be weaker than competitors in the cost. On the other hand, If its demand is large enough, the competitors will form a certain advantage when they bought all the products that OEM did.
In short, for some companies, the value of the standardized LED chip will be increasingly low. They will think about abandoning chip production gradually to the foundries in the industrial chain to find and focus resources to their own advantage. At this time, the OEM will form.
In addition, the LED chip foundry services segment of the subdivision, because not only vertically integrated firm has purchased chip demand, but many small lighting products business will also be on chip demand. However, the demand for foundry services have different product needs of the manufacturers of large-scale, standardized, small factories and small quantities of custom. The positioning of the different foundries will change, and some specialized services to manufacturers, and some specialized services to small factories.