European and American orders fell sharply

The economic downturn in Europe and the United States and the sharp drop in export orders have led to the fall of China's LED lighting industry, which is dominated by overseas markets. However, just as the market is in distress, the State Council recently discussed the adoption of the “Twelfth Five-Year Plan” of the National Basic Public Service System, which provides a 2.2 billion yuan subsidy for the promotion of LED lighting, which means that LED, like other home appliances, becomes a promotion. One of the tools for consumption and expansion of domestic demand. This is undoubtedly a stimulant for the troubled LED green lighting industry.

People in the industry pointed out that the domestic LED lighting market has great potential. Once it is really started, it will drive the industry back into the boom cycle. Therefore, LED lighting companies should adjust their strategies in a timely manner and shift their market focus to the domestic market.

30% drop in export orders

Similar to the photovoltaic industry, China's LED lighting industry has always been two ends: the core raw materials and technology from overseas, the market is concentrated in Europe and the United States, China's LED lighting industry is mainly concentrated in the downstream packaging. Relevant statistics show that 80% of domestic LED companies' products are mainly export-oriented.

Due to the economic downturn in Europe and the United States, sales of LED lighting products in China continue to decline in overseas markets. It is understood that from the second half of last year, lighting companies' overseas orders have been declining. Since entering this year, the downward trend in orders has become more apparent.

“This year, the market situation in Europe and the United States is particularly severe, and orders have decreased by 40%.” said Cai Yahui, chairman of Shenzhen Baochengxin Optoelectronics Technology Co., Ltd. Another LED lighting company head in Dongguan also revealed that orders from Europe have shrunk by more than 50%.

Pan Wenbo, the founder of Guangzhou International Lighting Exhibition and director of the Guangya Lighting Research Institute, said that due to the uncertain economic situation in Europe and the United States, the export of LED lighting companies in China may be even worse in the second half of this year.

Policy promoters started the domestic market to face this severe situation, LED lighting companies will pin their hopes on the start of the domestic market.

At the end of last year, the National Development and Reform Commission promulgated the "China Roadmap for Phase-out of Incandescent Lamps" and decided to prohibit the sale and import of incandescent lamps for general lighting of 100 watts and above from October 1, 2012; by October 1, 2016, sales and sales are prohibited. Incandescent lamps for general lighting of 15 watts and above. The issuance of this roadmap means that incandescent lamps will gradually withdraw from the historical stage starting this year, and the curtain of the domestic LED lighting market is gradually opening.

According to Pan Wenbo, there are currently about 15 billion incandescent lamps in the country, with annual production and sales of 3.85 billion and 1.07 billion. "The gradual elimination of incandescent lamps will form long-term benefits for the LED lighting industry and the energy-saving lamp industry. The market size formed by replacing only the existing incandescent lamps will reach several hundred billion yuan."

While eliminating incandescent lamps, the state has further increased its support for LED and hopes that LED can replace incandescent lamps as soon as possible. On April 12, the National Development and Reform Commission announced that in 2012, the Chinese government will spend 40 billion yuan on procurement of LED street lamps and provide 30% financial subsidies to LED street lighting users. The Guangdong Province also stipulates that starting in March of this year, all lighting projects and new planning areas financed by investment should use LED lighting products in the public lighting field.

The State Council discussed the adoption of the 12th Five-Year Plan for the National Basic Public Service System on May 16. It will provide 2.2 billion yuan to support the promotion of energy-saving lamps and LED lights.

The introduction of a series of favorable policies is of great significance to the launch of the domestic LED lighting market. Experts predict that by 2020, LED lighting market share in China will reach 80%, China will become the world's largest LED lighting market, the market size will exceed trillions of dollars.

The cost reduction is the key to market start-up. An ordinary LED is frequently costing several hundred dollars. At such a high price, most consumers will be rejected. Therefore, to really start the domestic LED lighting market, the rapid reduction of costs becomes the key.

“At present, the penetration rate of LED products in the civilian market is only about 5%. A major factor hindering the large-scale application of LED lighting products is the price. Once the cost of LED lamps is substantially reduced, it will inevitably promote the accelerated popularity of LED lighting products.” Shanghai Institute of Illumination The principal of the institute, Professor Zhang Haijun, said.

Pan Wenbo also pointed out that in the past two years, the annual cost reduction of LED lamps has been around 20%. Once the blowout occurs in the market, the cost will drop faster. "At present, LED chips account for nearly 60% of the cost of lamps and lanterns. It is estimated that the reduction in the price of optical chips will reduce the cost of lamps and lanterns by nearly 50%. With the improvement of packaging technology and the popularization of high-efficient and low-cost drive circuits, the cost of lamps and lanterns can be reduced to 30%. ~ 40%, to replace the 40-watt incandescent LED lamp prices down to 20 yuan to 30 yuan; street lamp decline is slightly smaller, but it can also be reduced to about the mainstream price of 1,000 yuan, will help LED lighting in the civilian market acceleration penetration."

Wang Yinghua, deputy general manager of Shanghai Sansi Electronic Engineering Co., Ltd., said that the rate of decline of chip prices is very fast; the speed of cooling and driving costs will be slower, but it will also decline every year. "Therefore, the potential for LED lamp cost reduction is great."

However, Pan Wenbo also stated that the lack of core technologies will be a deterrent to the rapid decline in LED costs. "The state should not only promote the breakthrough of core technology, but also have independent intellectual property rights while supporting the LED lighting industry application end."