The tormented LED industry seems to have some dawn.
On October 11, Guoxing Optoelectronics announced that it plans to invest no more than 400 million yuan to expand the company's packaging projects. This is the third time in a year that Guoxing Optoelectronics has expanded its packaging project. In the field of packaging, the market share of Guoxing Optoelectronics is second only to the industry leader Mu Linsen. And Mulinsen is also expanding the packaging project this year through a fixed increase.
The expansion did not reduce the marginal effect of the two companies. Both Guoxing Optoelectronics and Musensen had news of product price increases. The increase in prices is accompanied by an increase in production, which is considered to be the signal that the LED packaging industry has passed the fierce competition and ushered in the spring.
The two giants of the package are expanding this year.
On October 11, Guoxing Optoelectronics announced that it plans to invest no more than 400 million yuan to expand the company's packaging project. The expansion project construction period is from December 2016 to June 2017.
The reporter learned from the National Star Optoelectronics Secretarial Office that this round of projects will be used for the expansion of National Star Optoelectronics white light, RGB packaging and components. The RGB product category includes indoor and small spacing.
This is the third expansion of Guoxing Optoelectronics in one year. The determination to expand production was revealed at the end of 2015. At that time, Guoxing Optoelectronics issued three announcements, involving the capital increase and expansion of the two subsidiaries, respectively, claiming that the expansion of the packaging project of the self-owned capital investment company of no more than 400 million yuan. The equipment is expected to be completed, installed, commissioned and put into operation before March 2016.
In April 2016, Guoxing Optoelectronics announced that it would expand production. It plans to invest no more than 240 million yuan for the expansion of the company's packaging and component projects. The construction period of the expansion project is from May 2016 to December 2016.
The first expansion of output is now in the announcement of the resolution of the board of directors of Guoxing Optoelectronics. The description of the expansion background is “according to the company's strategic development plan and fully researching market demandâ€; in this year's two announcements, Guoxing Optoelectronics started Explain the expansion by using the “mitigation of insufficient capacity (situation)â€.
According to an interview with reporters, Guoxing Optoelectronics Co., Ltd. said that the first two rounds of expansion have achieved more than 40% capacity increase. "With the further popularization of LED products and the continuous expansion of market applications, the demand for company product orders continues to be full. â€
In addition to Guoxing Optoelectronics, the industry leader Mulinsen is also expanding by a fixed increase. On May 26 this year, Mu Linsen’s initial increase since the listing was completed, the amount of funds raised was 2.348 billion yuan. According to the plan, the funds raised by Mulinsen will be used for three projects, two of which are technical transformation and construction of the packaged project.
Concentration increases price increases
Behind the continuous expansion of the two giants, the survival of small and medium-sized enterprises is difficult. A research report of Guosen Securities on October 11 pointed out that in 2015, nearly 4,000 LED-related companies withdrew from the market, and the low-end and backward packaging capacity was fully eliminated, and the industry concentration was significantly improved.
Wu Yulin, president of Foshan Lighting Association, said in an interview that the package has a certain technical content, so the threshold is relatively high. The current trend in the industry is to continue to concentrate on the giants. "For Foshan as an example, the original revenue for many years. More than 10 million packaging factories can't do it anymore. There used to be about ten. There are only two or three left, and I guess it will continue to decrease."
An important means of "blood-washing" competitors is the price war. Listed companies often form a siphon effect on downstream customers at low prices, thus forcing competitors.
While the two giants are expanding production, they are also raising the price of their main products. At the end of August, a notice photo with the official seal of Shenzhen Mulinsen Guangxian Technology Co., Ltd. (a wholly-owned subsidiary of Mulinsen) appeared on various LED portals. The notice stated that “due to changes in the market... scheduled for September 2016 From 1st onwards, the price of the display RGB lamp beads supplied to your company will be increased by 5%."
Since then, Guoxing Optoelectronics has also quickly followed, on September 1, Guoxing Optoelectronics pushed the article on its official WeChat, "National Star Display Devices will not rise in the end?" The truth is here, the first sentence of the article is: "On September 1, Guoxing Optoelectronics decided: the company's display device prices will increase by 10%."
Wu Yulin said that for the two companies, the bargaining power of the competitors is improved after the competitors are squeezed out, and the price increase of the products is also a normal performance.
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