In order to help accelerate the development of the LED industry, Chinese manufacturers are increasing investment in product development and related activities, and the average investment level will account for about 5% of operating income.
Most suppliers are stepping up production to meet growing domestic demand overseas. It is expected that manufacturers will invest in increasing production capacity. Guangdong Province may issue large orders for 1,500km LED street lighting projects covering Dongguan, Foshan, Guangzhou and Shantou.
R & D plan to deal with expired LED patents Some R & D programs are designed to deal with the expiration of several patented LED technologies. Exposing these solutions will allow manufacturers to develop new lighting concepts and increase competition in the market.
For example, in 2008, Chinese companies applied for nearly 26,000 patents, most of which belong to LED packaging technology and applications.
For diode-based products and other light sources, raising energy-saving levels and reducing costs will be the focus of research and development. The emphasis will also be placed on improving durability and product life.
At present, the life of LED bulbs is usually around 10,000 hours, but some designs are above this average. At the same time, the lifetime of most CFLs is longer than 5,000 hours. More than 8,000 or even 10,000 hours of products are also available.
Prices depend on power, size, materials of manufacture, and technology used. Most of the raw materials are purchased from domestic companies, but some are also purchased overseas as needed. For example, ABS is usually imported from South Korea. Several thermoplastics produced in Taiwan can also be used.
LED product manufacturers usually purchase diodes and chips, the latter mainly from the United States or Taiwan. Other lighting solutions are usually purchased from well-known companies such as Cree, Philips, Osram and Nichia.
The cost of most raw materials is expected to remain stable in the coming months. As the major packaging technology patents will expire within the year, it is expected that the price of LED chips will fall by 5-10%. The expiration of a patent may reduce the license fee and keep the price stable for the next six months.
LED-based products are expected to increase penetration in the residential and non-domestic sectors. As technology advances reduce costs and prices, the market will speed up the acceptance of these products.
LED landscape lights are the main export products LED products are being used in many major indoor and outdoor lighting applications, replacing fluorescent and incandescent lamps. In terms of garden and landscape light sources, LED products account for a significant proportion of production and overseas exports.
The lighting and electrical export situation in 2009 shows that the market is changing to green technology. In October 2009, shipments increased by 11% year-on-year to more than 3 billion, a significant improvement from the previous nine months. From January to September 2009, overall shipments fell by 24%. CFLs, LED bulbs, and fixtures used with these light sources grew most strongly during the first 10 months of 2009.
For example, CFL shipments fell by only 6% to 1.7 billion. CFLs are 30-40% cheaper than LED bulbs and are more attractive in terms of price. Most suppliers expect CFL shipments to increase by 10% in the second half of the year.
The supplier expects sales of LED lighting products to increase by at least 10% in the first half of 2010. Vendors may continue to consolidate their markets in Europe, North America and the Asia-Pacific region, which are currently the major export markets.
However, there will be more manufacturers to develop potential markets, such as Africa, where these markets have high demand for low-end products and have fewer trade barriers.
Foreign investment into Chinese LED manufacturing companies China is consolidating its position as a major global LED producer. In recent months, some leading international companies have invested in the construction of factories in the Pearl River, the Yangtze River and the Lancang Delta, the Bohai Economic Zone and even Western China.
"This year China will become the main battlefield for global LED manufacturing." Zheng Haowen, director of the National LED High-tech Enterprise Development Committee, stated that "the total foreign investment in this field is expected to exceed US$8.8 billion, which is a substantial increase from the approximately US$1.5 billion in 2009."
In order to encourage international companies to build factories in the mainland, the local government introduced a policy of subsidizing construction costs. For example, a financial support fund of 1.46 to 2.93 billion US dollars was established in Nanhai District, Foshan, Guangdong Province. The project was established in October 2009 to support the semiconductor lighting industry in the region.
One of the results of this move was that the United States SemiLEDs invested $350 million to establish a new plant in the South China Sea area. The plant is named "Xu Rui Optoelectronics Co., Ltd." and will use SemiLEDs patented metal-based vertical structure of LED production wafers and high-power chips. The first phase is planned to be fully operational in October 2010. The monthly production capacity of 1x1mm LED chips is 20KK. It is expected that after the completion of the third phase of investment at the end of 2013, the production capacity will exceed 380KK/month.
Yangzhou, Jiangsu has similar policies. The municipal government took out $3.51-3.66 billion to subsidize MOCVD equipment purchases. The fund will be in place by October 2011. Through this policy, Yangzhou will assume 1.5 million U.S. dollars for each equipment purchase. Depending on the specific specifications of the equipment, the price of MOCVD equipment is around US$4.4 million.
Formosa Epitaxy quickly took advantage of this preferential measure. The company cooperated with Dongbei Optoelectronics, Ruixuan and Korea LG, and invested 150 million U.S. dollars to establish an LED epitaxial chip factory-Jiangsu Xiaoyang Company in Yangzhou. After full production in May, Jiangsu Yiyang is expected to produce up to 1 billion LED chips per month. Its products will be mainly used for LCD panel backlight.
Other local governments are also adopting the same strategy. After the National Development and Reform Commission released the latest industry guidance in October 2009, city officials have increased their support for the LED industry. From 2009 to 2011, Shenzhen will allocate a total of 14.6 million US dollars of funds each year to help the development of the LED industry. Putuo District of Shanghai allocated 57.5 million U.S. dollars in special funds for the LED industry in 2010. Cree Corporation of the United States and Osram of Germany are building LED production plants in Huizhou and Foshan, Guangdong.
Taiwan Epistar is also taking the same action. It is working with Taiwan-based LED packaging company Lite-On and mainland home appliance manufacturers, and will invest 120 million US dollars to establish a factory in Changzhou, Jiangsu Province. It also established a joint venture with UMC and established an LED factory in Shandong Province with an investment of US$16 million.
Most suppliers are stepping up production to meet growing domestic demand overseas. It is expected that manufacturers will invest in increasing production capacity. Guangdong Province may issue large orders for 1,500km LED street lighting projects covering Dongguan, Foshan, Guangzhou and Shantou.
R & D plan to deal with expired LED patents Some R & D programs are designed to deal with the expiration of several patented LED technologies. Exposing these solutions will allow manufacturers to develop new lighting concepts and increase competition in the market.
For example, in 2008, Chinese companies applied for nearly 26,000 patents, most of which belong to LED packaging technology and applications.
For diode-based products and other light sources, raising energy-saving levels and reducing costs will be the focus of research and development. The emphasis will also be placed on improving durability and product life.
At present, the life of LED bulbs is usually around 10,000 hours, but some designs are above this average. At the same time, the lifetime of most CFLs is longer than 5,000 hours. More than 8,000 or even 10,000 hours of products are also available.
Prices depend on power, size, materials of manufacture, and technology used. Most of the raw materials are purchased from domestic companies, but some are also purchased overseas as needed. For example, ABS is usually imported from South Korea. Several thermoplastics produced in Taiwan can also be used.
LED product manufacturers usually purchase diodes and chips, the latter mainly from the United States or Taiwan. Other lighting solutions are usually purchased from well-known companies such as Cree, Philips, Osram and Nichia.
The cost of most raw materials is expected to remain stable in the coming months. As the major packaging technology patents will expire within the year, it is expected that the price of LED chips will fall by 5-10%. The expiration of a patent may reduce the license fee and keep the price stable for the next six months.
LED-based products are expected to increase penetration in the residential and non-domestic sectors. As technology advances reduce costs and prices, the market will speed up the acceptance of these products.
LED landscape lights are the main export products LED products are being used in many major indoor and outdoor lighting applications, replacing fluorescent and incandescent lamps. In terms of garden and landscape light sources, LED products account for a significant proportion of production and overseas exports.
The lighting and electrical export situation in 2009 shows that the market is changing to green technology. In October 2009, shipments increased by 11% year-on-year to more than 3 billion, a significant improvement from the previous nine months. From January to September 2009, overall shipments fell by 24%. CFLs, LED bulbs, and fixtures used with these light sources grew most strongly during the first 10 months of 2009.
For example, CFL shipments fell by only 6% to 1.7 billion. CFLs are 30-40% cheaper than LED bulbs and are more attractive in terms of price. Most suppliers expect CFL shipments to increase by 10% in the second half of the year.
The supplier expects sales of LED lighting products to increase by at least 10% in the first half of 2010. Vendors may continue to consolidate their markets in Europe, North America and the Asia-Pacific region, which are currently the major export markets.
However, there will be more manufacturers to develop potential markets, such as Africa, where these markets have high demand for low-end products and have fewer trade barriers.
Foreign investment into Chinese LED manufacturing companies China is consolidating its position as a major global LED producer. In recent months, some leading international companies have invested in the construction of factories in the Pearl River, the Yangtze River and the Lancang Delta, the Bohai Economic Zone and even Western China.
"This year China will become the main battlefield for global LED manufacturing." Zheng Haowen, director of the National LED High-tech Enterprise Development Committee, stated that "the total foreign investment in this field is expected to exceed US$8.8 billion, which is a substantial increase from the approximately US$1.5 billion in 2009."
In order to encourage international companies to build factories in the mainland, the local government introduced a policy of subsidizing construction costs. For example, a financial support fund of 1.46 to 2.93 billion US dollars was established in Nanhai District, Foshan, Guangdong Province. The project was established in October 2009 to support the semiconductor lighting industry in the region.
One of the results of this move was that the United States SemiLEDs invested $350 million to establish a new plant in the South China Sea area. The plant is named "Xu Rui Optoelectronics Co., Ltd." and will use SemiLEDs patented metal-based vertical structure of LED production wafers and high-power chips. The first phase is planned to be fully operational in October 2010. The monthly production capacity of 1x1mm LED chips is 20KK. It is expected that after the completion of the third phase of investment at the end of 2013, the production capacity will exceed 380KK/month.
Yangzhou, Jiangsu has similar policies. The municipal government took out $3.51-3.66 billion to subsidize MOCVD equipment purchases. The fund will be in place by October 2011. Through this policy, Yangzhou will assume 1.5 million U.S. dollars for each equipment purchase. Depending on the specific specifications of the equipment, the price of MOCVD equipment is around US$4.4 million.
Formosa Epitaxy quickly took advantage of this preferential measure. The company cooperated with Dongbei Optoelectronics, Ruixuan and Korea LG, and invested 150 million U.S. dollars to establish an LED epitaxial chip factory-Jiangsu Xiaoyang Company in Yangzhou. After full production in May, Jiangsu Yiyang is expected to produce up to 1 billion LED chips per month. Its products will be mainly used for LCD panel backlight.
Other local governments are also adopting the same strategy. After the National Development and Reform Commission released the latest industry guidance in October 2009, city officials have increased their support for the LED industry. From 2009 to 2011, Shenzhen will allocate a total of 14.6 million US dollars of funds each year to help the development of the LED industry. Putuo District of Shanghai allocated 57.5 million U.S. dollars in special funds for the LED industry in 2010. Cree Corporation of the United States and Osram of Germany are building LED production plants in Huizhou and Foshan, Guangdong.
Taiwan Epistar is also taking the same action. It is working with Taiwan-based LED packaging company Lite-On and mainland home appliance manufacturers, and will invest 120 million US dollars to establish a factory in Changzhou, Jiangsu Province. It also established a joint venture with UMC and established an LED factory in Shandong Province with an investment of US$16 million.
Controller,video processor,led display controller
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