LED Industry Institute research report pointed out that these high power green LED companies to be listed are mostly concentrated in the packaging field. In fact, LED packaging companies, profit is not huge. Xiao-Fei Zhang, Zhejiang Industry Research Institute, revealed that the packaging companies in China more than 1,200 production capacity more than the market demand. Packaging companies, small-scale, homogeneous competition triggered a price war, gross margins continuing to fall. “Excess capacity is not necessarily a bad thing, will automatically exit the sake of profits.” The industry believes that, in the current LED market, the ability to control costs has become the core competitiveness of enterprises, unable to hold down costs of enterprise can only accept acquisition or closure of fate.
The big companies want to scale to lower the costs to survive in this price war has begun. Zhang Xiaofei, domestic high power green LED industry is still in its infancy, the gap between the enterprises is not obvious, the advantages of enterprise gap, quickly established a leading position in the industry segments. Some companies choose M & As for expansion, whether expansion or mergers and acquisitions, the need of large sums of money. Undoubtedly, the present LED upstream investment, overheating, and we all think he can come to the fore. Zhang Xiaofei, said capacity endless excess questioned, but the capital markets sought to LED high bay lighting industry continues in upstream LED companies in the funds will be used for research or expansion, the main purpose is to hold down costs. “He predicted the next two years will also have a number of LED companies IPO. VC (venture capital) also contributed to the factors of LED companies IPO. He said that the domestic LED early in the development of multi-channel VC (venture capital) of all ages, and when the enterprise has developed into the leading segments, VC obviously hope to encourage enterprises to be listed and a timely exit.