LED industry: The industry continues to consolidate and will accelerate the exit of ineffective production capacity from the market next year

The LED Forum 2015 seminar was held on the 23rd. Zhou Xuejun, Asia marketing director of Lumileds, and Chu Yu, research associate director of TrendForce's Green Energy Division, said that the super-double dual-tuned LED industry is short-term but long-term. Although next year will still be a period of pain, as ineffective production capacity accelerates to exit the market next year and prices hit bottom, more developments and applications will be triggered. They are still optimistic about the development of the LED industry in the long term.

LED stocks have performed sluggishly this year because the first quarter was the peak of the economy, and operations in the fourth quarter were between flat and negative compared with the third quarter. Therefore, LED stocks are mostly at a low level; the current stock price-to-book ratio (P/B) of Epistar is only 0.5 times; after Everlight clarified the rumors of unpaid leave, the stock price decline has also slowed down.

In LED At the Forum 2015 seminar, Zhou Xuejun and Chu Yuchao released the industry trend of short-term and long-term growth in the LED industry. Although they agreed that the LED industry still has a period of pain, it can enjoy the fruits after surviving the pain period. Zhou Xuejun is still confident in the LED industry and expects that the overall output value will see double-digit growth next year; Chu Yuchao believes that the industry will continue to consolidate and the withdrawal of ineffective production capacity from the market will be accelerated next year.

Zhou Xuejun pointed out that the LED industry is still in a state of oversupply. This year, you can buy two LED lights for $5 in the U.S. market. Last year, you could buy two LED lights for $7 to $10. LEDs are sold almost by the pound. Next year, they may still be in pain, but companies that survive the pain period will be able to taste the fruits. After the sharp drop in LED costs, there are still many areas that can be developed. He is still confident in the LED industry.

Chu Yuchao said that the penetration rate of LED lighting this year has reached 30%, and shipments in 2016 are also expected to grow by 30%. However, mainland chip factories are rushing to purchase more machines before subsidies end. New production capacity from Sanan and Epistar has been launched this quarter. It is estimated that the new production capacity will reach 8% in a single month in the fourth quarter. The situation of overcapacity will continue. As mainland China no longer invests in subsidies for the LED industry in its 13th Five-Year Plan, ineffective production capacity will be withdrawn from the market next year, which will help industry consolidation.

Chu Yuchao pointed out yesterday that LED manufacturers are struggling to expand in the lighting market, expecting profits from falling prices and increasing volume. However, although the industry has experienced rapid expansion in the scale of LED lighting this year, it has been a year of heavy losses for major manufacturers. The situation of more sales and more losses has accelerated the exit of the industry. As subsidies in mainland China slow down, the LED industry order will gradually recover.

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