Regarding the collapse of LED small and medium-sized enterprises, industry leaders have something to say

LED display companies frequently close down, highlighting the reshuffle of the LED display industry. According to industry experts, the reasons for the collapse of LED screen companies are different, and they have their own unique insights into how to survive the industry reshuffle.

Yang Qinkang, deputy general manager of the business department of Shenzhen Absen Optoelectronics Co., Ltd.:

The main reason for the collapse of the company is the collapse of the capital chain. Some companies have a relatively simple customer structure, often with only one or two customers. These two customers control the lifeblood of the company. If you are not careful, everything will be lost. It is often said that people are like snakes when they are not enough. Some companies take on projects that are beyond their capabilities, and their technology and funds cannot keep up, resulting in delayed product release or substandard product quality. In the end, they can only solve the problem with compensation. If you cannot make ends meet, your fragile capital chain will be broken at the first touch.

In addition, the demand for LED displays as a whole has dropped, outdoor screens have decreased, and competition for indoor screens has become fierce. Upstream companies have cut prices, squeezed downstream, squeezed upwards, and squeezed into the middle. Some companies with unclear positioning and no core competitiveness have been squeezed out. In addition, systemic price changes within the industry have caused overcapacity, inventory accumulation, and declining profits for small and medium-sized enterprises.

Xiang Jianyong, General Manager of Shenzhen Lianjian Optoelectronics Co., Ltd.:

Companies will go bankrupt, mostly due to failure to control their own development. In fact, every enterprise has its own characteristics and should find its own positioning and develop into segmented markets. When a problem arises in a business, it must be "searched." First, layoffs and adjustments to reduce the size of the company; second, take the essence and remove the dross, and keep high-quality customers.

Cai San, Director of the Marketing Management Department of Shenzhen UniMing Technology Co., Ltd.:

Small spacing is a "pit", doing small spacing is "seeking death", not doing small spacing is "waiting for death". There are four reasons: first, the threshold for small spacing is high; second, R&D costs and personnel costs are high; third, training costs for business sales personnel are high; fourth, technology and supply do not meet requirements. In fact, not only LED display manufacturing companies are closing down, but packaging plants are also closing down. Small spacing will accelerate the death of companies.

So how should small and medium-sized enterprises survive? Be refined and specialized, start with peripheral products, develop into a certain field, and combine with market segments. Enterprises should find their own way out and aim in the right direction in order to survive in the fierce market.

Cheng Deshi, General Manager of Shanghai Sansi Electronic Engineering Co., Ltd.:

In fact, business "bankruptcy" happens from time to time, and it is commonplace if we see it too often. This is actually a normal economic law. On the other hand, corporate “runaway” incidents occur frequently, which reflects from the side that China’s economic environment, legal system construction, and credit system construction are still in their early stages, and the sense of responsibility and integrity of some Chinese entrepreneurs urgently need to be improved. At this stage, in most application fields, LED display screen is not a standardized product, it is a project. It requires a large group of engineers, product integrators, and dealers, which is destined to prevent the industry from quickly forming a "Matthew Effect." For them, if they are cautious and operate steadily, they may be able to survive happily and achieve steady growth, but they may also be tepid for a long time and ultimately difficult to maintain; if they are aggressive and hard-working, they may collapse quickly, or they may be able to break out of a new world. In addition to the courage, wisdom, experience, and ability of the operator, this often also requires a little luck.

Jiang Xiangrong, deputy general manager of Shenzhen Chip Optoelectronics Co., Ltd.:

The blind expansion of enterprises has led to the break of the resource chain; for small and medium-sized enterprises, they should seek survival first and then develop. How to consolidate the capital chain? First, enterprises must find their own positioning and combine capital planning strategies; second, enterprises must strengthen their own management, clarify their strengths and weaknesses, and make up for shortcomings.

Tang Huijun, General Manager of Decai Optoelectronics Shenzhen Headquarters:

The wave of bankruptcies will continue and intensify. There are two main reasons: First, market finance intensifies the bankruptcy process of enterprises. Market finance is a double-edged sword. In a specific period, it can help companies raise funds, adjust production scale, and avoid market risks. If each company targets different niches, then there will be no fierce competition, and they can dominate in their own fields. However, there is vicious competition in the current market. Even if everyone is on the same line, they cannot avoid the situation of competing for each other. Even if large companies are like this, the living space of small companies will inevitably be slowly squeezed. This is the main reason for the collapse of Zhongxiang Innovation and Light Energy Technology.

Second, the LED industry’s unstandardized competition management has resulted in companies being unable to withstand excessive risks, ultimately resulting in the frequent collapse of small businesses. If a company can clearly define its positioning in the red ocean competition, segment the product market, be specialized and detailed, and base itself on technological innovation, it can not only attract capital acquisitions from some listed companies, but also stand out from the whirlpool of vicious competition. Even if the profit is not high, it can still live happily. In addition, chaotic internal management and brain drain are also among the reasons why companies fail.

Jiang Zhongyong, General Manager of Hangzhou Mekal Optoelectronics Co., Ltd.:

First of all, the existence of an enterprise must have its own value. From a macro perspective, an enterprise must contribute to the development of social economy; from a micro perspective, an enterprise is like a big family and must seek benefits for its employees; if these two points are not achieved, then the enterprise has no meaning of existence, and it is only a matter of time before it goes bankrupt. Nowadays, China's LED industry has low barriers to entry. New companies are springing up like mushrooms after a rain. There is no doubt that competition is fierce. It is only wise to enhance technological innovation and launch high-quality products. Unfortunately, most domestic companies have not found their own suitable positioning and have no core competitiveness, resulting in poor management and bankruptcy.

From another perspective, bankruptcy and running away are also a normal phenomenon. The development of any industry is a gradual process, and the concentration of the industry is directly proportional to its maturity. The concentration of the LED industry is getting higher and higher, starting from immaturity and gradually becoming mature. Currently, there are many LED companies whether they are making displays or chips, whether they are packaging or applications, but they are often too many but not complete, too many but not big, and the companies do not have their own core competitiveness. As time goes by, large companies continue to eat away at the market share of small companies, and small companies are eventually eliminated. This is a natural law.

The second is the scale effect. Except for a few listed companies, Chinese LED companies are a mixed bag, causing small companies to face fierce competition in the market. The market is squeezed and profits decline. To save the situation, you must always think from the customer's perspective. This requires companies to improve product cost-effectiveness and avoid homogeneity.

Finally, the capital chain was broken. The LED industry has experienced explosive growth in the past few years, and many companies are doing prosperously. However, competition in the industry is now fierce, and most companies often hope to achieve success overnight and sit back and relax. Faced with the rupture of the capital chain, their hearts are as clear as a mirror, but they place their hopes on the future, hoping that pie will fall from the sky, and even rely on bank loans and pressure on suppliers to pay for goods, which appear to be prosperous in the short term. Therefore, in short, if an enterprise wants to develop, it must be based on the current situation, appropriately expand production, stabilize capital flow, strengthen the "blood-making" function of the enterprise, and provide bank loans within the scope of its capabilities. Objectively speaking, the wave of bankruptcies will continue because our industry has not matured yet.

Cao Meng, assistant to the general manager of Shenzhen Konjia One Vision Commercial Display Co., Ltd.:

Regarding the recent wave of bankruptcies, I think one of the most direct common causes is vicious competition, price wars, and loan advances when capital turnover is insufficient. The entire capital flow is disrupted, leading to a break in the capital chain. Secondly, product homogeneity leads to price wars, which makes customers' stability relatively weak and their loyalty low. On the contrary, although some companies are not large in scale, they are successful because their products have unique features and their customer resources are relatively stable. As the saying goes, "Be born in trouble, die in happiness." A few years ago, the "water" in the LED industry was relatively deep, and everyone was living smoothly without making progress; in recent years, as soon as the water level in the river dropped, many companies were stranded and fell into the crisis of bankruptcy. In the face of fierce price wars, large companies rely on their financial advantages to play a combination of punches. Although they do not make money, they can still afford to lose money. Small businesses "can't afford to offend or hide". If they don't follow the trend, they will either be "seeking death" or "waiting for death."

For small and medium-sized enterprises, especially manufacturing enterprises, once you want to expand your scale, your operational investment will increase accordingly. If investment increases and the market shrinks, it will bring great risks. Therefore, small and medium-sized enterprises must have forward-looking thinking and strategizing to survive every battle and avoid blind expansion. Secondly, we need to delve deeply into subdivided areas and make our products refined and specialized.