This type of government leading developing mode has been questioned by many experts and insiders. They generally thought that the excessive government support will give birth to the dependency of domestic LED manufacturers. They will be keen to project biddings rather than promote innovations in products and market. In fact, this tendency is obvious. Many LED manufacturers would like to apply projects under explicit state policies to enjoy the subsidies. In Mr. Wu’s opinion, LED high bay lighting is a big direction. But in most conditions, local governments became more and more utilitarian. “lighting is easy, maintain the lighting is not so easy.”
Fallen upstream.
“In LED lighting area, we should be alert every moment. Otherwise, the government subsidies will be in foreign companies’ back pocket.” One office from material section of MIIT said to reporters. In his point of view, there are two main reasons for the government substantial supports in this field: 1. The urgent needs for energy saving; 2. The huge economic potential in global LED lighting market. However, Chinese manufactures are in the lowest position of the entire industrial chain, especially for indoor LED lighting products. Normally, LED industry chain can be divided into three parts: upstream, midstream and downstream. Upstream is chip manufacture, epitaxy manufacture and equipment manufacture. Midstream is chip package. Downstream is LED street light applications manufacture. Upstream LED chip manufacture has been monopolized by Cree, Philipslumileds and Nichia. And chips for LED low-end products have also been controlled by chip manufacturers from Taiwan. Currently, the cost of LED chip is occupied more than 60% of the entire LED lamp cost. When domestic LED companies successfully listed, they had to face up the fact that developing upstream market, inventing their own LED chips. In accordance to the national regulations, large LED enterprises should bear responsibility of independent innovations of LED core technologies. Whether these listing LED enterprises can hold seats in LED upstream market is still anyone’s guess.
At present, our manufacturers of indoor LED lighting products are concentrated on midstream and downstream. LED package and LED applications manufacture have relatively low-barrier, leading to the fierce competitions from domestic LED company. Profit is increasing reduced. Nowadays, most sophisticated LED chip technology is held in the hand of foreign companies. This technologies are protected by patent right. Domestic manufacturers have to pay for them. “We have become workers for foreign companies.”
