Five major critical points of the LED lighting industry

Local protectionism in support policies:

LED has been developed more than 20 years in China. Each year, the China Government (related departments or sectors) would launch a series of LED-related support policies and projects. Also many local governments will introduce policies to nurture local LED lighting companies, giving priority to the local LED manufactures in large municipal landscape lighting projects and traffic lighting projects. Thus most of LED Panel Light companies paid most of their attentions on participation in biddings/tenders of government projects. Besides, domestic LED lighting industry has no unified standards for LED electronic and optical parameters. Different regions have their own standards. It is very hard for LED companies to exploit markets in other regions, blocking the development of the LED lighting industry.

 

Each year, the China Government (related departments or sectors) would launch a series of LED-related support policies and projects.

 

Lacking of brand awareness;

There are a large number of LED makers. Most of them lack of independent brand, which disordered the market. Different products from different companies have quite different qualities. Unauthorized patent using and infringement happened frequently.

 

Civilian LED lighting applications needs the government support urgently;

Normally, LED lighting fixtures (like LED bulbs, LED flood lights) are more expensive than other traditional lighting products. The expensive upfront investment shakes the resolve of governments to support civilian LED lighting applications. So that the promotion of indoor (residential) LED lighting fixtures is much slower than other western countries. Currently, most of lighting associations (from different provinces and regions) are positively in response to the government support. But the more than 80% are municipal landscape lighting projects and traffic lighting projects, much less LED lighting products were used in civilian applications.

 

Bottlenecks of technology and equipment;

In the aspect of LED substrate technology and wafer production equipment, domestic LED lighting industry is obviously in a bottleneck stage. Most of independent innovations and patens are concentrated in the package area. Some critical core technologies, like white-ray LED, the heat dissipation of high-powered LED lighting fixtures, durable and efficient phosphor technology, are unfortunately controlled by larger foreign companies, mainly from Europe, North America and Japan. Domestic LED products still lag behind the international level in many respects: luminous efficiency, antistatic ability, anti-leakage ability and quality control.

 

Lacking of pricing power;

The majority of domestic LED companies are relatively small. The scattered and limited resources hindered the development of the LED lighting industry. Also relying on importation in the upstream LED chip area made domestic LED companies lose the pricing power.