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LED Industry Will See More Merger and Cooperation in China
alexyang   1/10/2013 3:41:59 AM

LED lighting, as a green light source, indeed shows huge development outlook, due to the characteristic of energy-saving as well as policy support from worldwide countries; but just because of the bright future, the global LED lighting market falls into gloomy situation, and suppliers in the line, especially those from Taiwan and Chinese Mainland, are facing ever more severe competition. This situation might force some companies, sooner or later, to withdraw from the market. The industry forecasted that around 30% of the LED lighting companies in the greater China area would shut down or merge within three years.

Thanks to the proliferation of small and medium-sized LED lighting manufacturers since the early 2000s, the most severe oversupply problems have been experienced in the field of low- to medium-priced products. The manufacturers of those products may be the first to be forced out of the market.

"For LED lighting companies in China, the end of the high-profit period has come and 2013 will usher in a new era of domination by slim-profit operational strategies," said the Topology Research Institute.

Another brewing trend for the greater China market is the strengthening of cooperative links between Taiwanese and Chinese mainland companies for the joint development of the LED lighting market in China, where the Beijing government has instituted measures to boost sales of this new-generation lighting under its green-industry policy.

The announcement in November 2012 of a merger between San'an Optoelectronics, the largest MOCVD (Metal Organic Chemical Vapor Deposition in Chinese mainland, a key upstream material for LED bulbs) maker, and Formosa Epitaxy Inc., Taiwan's second-largest MOCVD maker, came as no surprise to industry observers. For LED companies on the two sides of the Taiwan Strait, this merger will set an example of the integration of resources for strengthened competitiveness not only in the greater China area, but also in the worldwide market.

Analytics from Baitron Electronics

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