Small and medium-sized LED companies still rely on exports in the second half of the year

[Source: "High-tech LED-lighting market" July issue / Zhang Wei]

The European debt crisis has caused the export environment to deteriorate rapidly. The largest region is China and Africa. Export orders have fallen sharply, making the Chinese LED lighting industry, which is dominated by overseas markets, fall into a trough. According to data from the 111th Canton Fair, orders from LED companies from Europe and the United States fell by 30% to 40%. In the case of continued sluggish export sales, the promulgation of favorable policies in May has given the troubled LED green lighting industry a shot in the arm, and has caused more companies to turn their attention to domestic sales.

The "12th Five-Year Plan for the Development of Semiconductor Lighting Technology" (Consultation Draft) issued by the Ministry of Science and Technology on May 7th proposes that by 2015, large-scale MOCVD equipment and key raw materials will be localized, and the cost of LED products will be reduced to 2011. 1/5. By then, the huge Chinese civil market will accelerate.

In addition, in the “Working Conference on Promoting the Application of LED Lighting Products in the Province” held by Guangdong Province, the Guangdong Provincial Government and various localities and municipalities signed a letter of responsibility for promoting the use of LED lighting products, and included the promotion and application of LED lighting products in energy conservation and emission reduction assessment. And the assessment results as an important basis for the assessment of energy-saving emission reduction responsibility.

However, many SMEs in China are worried that government subsidies and favorable policies will be biased towards individual large companies, which will not help much for many SMEs. In addition, favorable policies will attract more people into the LED industry and intensify market competition.

It is very likely that the company's capital chain will break or even close down. Therefore, for small and medium-sized enterprises, the economic environment may be even worse in the second half of the year.





Export companies need to be alert to the European crisis

For current domestic companies, the region with the largest decline in orders is the European market. At the 2012 Guangzhou International Lighting Exhibition (referred to as the Guangya Exhibition), there were very few visitors from Europe and the United States. According to a recent report by Standard Chartered Bank, if there is a crisis in Europe, the biggest impact should be China and Africa, which account for a relatively large proportion of exports to Europe.

The crisis from Europe is mainly whether Greece launches the EU. If Greece withdraws from the EU, it will bring a chain reaction. Italy, Spain and so on will be the hardest hit areas of the next crisis. This will definitely cause people in crisis countries to run against the euro, which will lead to the euro crisis in European banks, which will cause European companies to face a large financial crisis, and panic will make the people more tightened. The belt is worn.

The Standard Chartered Bank report pointed out that the European crisis has led to a sharp decline in demand for African exports and a significant increase in operating costs. As most European financial institutions are under tremendous pressure from capital restructuring, there are already signs that European banks are beginning to take asset disposal and fully tighten their lending to Africa.

In addition, the crisis in the Eurozone may trigger a fall in the prices of bulk raw materials, which will also pose a significant challenge to most African countries that produce and export these commodities as the main economic pillar.

Therefore, domestic LED companies should be alert to the risk of a sharp deterioration in the global export environment brought about by the European crisis. Sun Jianning, general manager of Shangyu Lighting, told reporters that “the European orders for the Canton Fair have fallen sharply this year, especially for some holiday items such as Christmas lights, and these products are very popular in previous years. Since last year, orders for holiday-type lights have been In the continuous decline, domestic enterprises should be vigilant and respond in a timely manner."

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