“Since January, the price of LED STREET LIGHT chips dropped by 20%, while demand was less than our expected. Many enterprises faced with tremendous pressure. We had to adjust our strategy repeatedly.” Said Zhou Zheng, regional manager of Philip Advance in China. Chinese LED chips market has already saturated, plus the recent financial crisis, chip giants are struggling, not to mention small and medium sized domestic LED chip manufacturers. “We do not expect profits, we just want to survive. We are suffering financial crises, if we can survive this period of time, we may see the dawn” said Mr. Zheng. According to sources, many chip enterprises canceled their new products promoting plans, and temporarily turn their attention to other electrical products market. This is not to say that they gave up the LED lighting market. In fact, it is a kind of retreat for the sake of advancing. They save their power for later use.
Unbearable burden gave birth to the reconstruction of domestic LED chip manufacturers.
LED chip companies from America, Korea and Taiwan have successively entered Chinese LED lighting market. As for LED chip manufacturers, competitions are always international. Currently, there are more than 100 domestic LED chip companies, in which Sanan Optoelectronics, ChangLight, Inspur and AquaLite are relatively large chip enterprises in China. However, compare with overseas rivals, they are still far behind. “We need the support of government, both in technological aspect and in commercial aspect. China is the largest LED factory in the world, more than 70% LED applications produced and exported here every year. We should control this market. ” said Xiangyi Hu, marketing manager of Sanan Optoelectronics. Some experts raised objections. “Technology is not the key point to survival. There are two main factors for enterprises to win this battle: product quality and cost.”
In 2007, Chinese LED chip industry output reached 4 billion yuan, increased 100%! But in 2011, the average growth rate is only 10%. In 2008, the total sales of Chinese top ten LED chip companies is over 2.7 billion yuan, accounting for nearly 70% of the annual LED chip industry output. Even now these old LED chip giants still can guarantee stable annual sales of 100 million yuan. Competitions from foreign companies did not cause great pressure to them. But small and medium sized domestic LED chip manufacturers were not so lucky. This attack can say a catastrophe for them.