Mulinsen entered the 10th place in the global packaged LED market in 2013 for the first time. Its ranking in 2012 was 14th. Other companies on the list are located in South Korea, Japan, the United States, Germany and Taiwan. The specific ranking is shown in the figure below:
Jamie Fox, chief analyst of IHS pointed out, "Since 2011, most of the world's new LED production capacity has occurred in mainland China; because of this, mainland companies will inevitably enter the top ten in the world. Before Mulinsen became the world's LED upstart, it established its leading position in the Chinese market with the help of strong domestic demand. For major suppliers, the rise of Mulinsen means that mainland Chinese companies will soon become the main competitors in the global LED business."
The above findings are taken from the IHS LED Intelligence Service.
China’s LED market explodes
Mulinsen is just one of the many LED suppliers that emerged when China’s LED industry exploded. However, other companies are ranked outside the global top 20. The base of China's LED suppliers is very large and highly fragmented, with thousands of companies located in different regions of the country.
IHS China analyst Tao Tingting pointed out: "Although Mulinsen is the largest domestic supplier, its sales in 2013 were less than 10% of the entire Chinese LED device sales. The next five LED packaging companies together only represent about 20% of the market.
As China's LED production capacity continues to increase, concerns about overcapacity have increased. MOCVD (the most important equipment in the entire LED production process) purchased by some companies has been idle. Observers are worried that overcapacity may lead to the collapse of some Chinese companies.
However, so far, only some smaller Chinese suppliers have stopped LED operations. The companies at the top are still active in the market and making considerable profits.
From an isolated domestic market to the international market
Mulinsen and other smaller Chinese suppliers are competing for more of the domestic LED market. The sales share of these companies in the international market is very small.
At the same time, due to the extremely low prices in China’s mid- to low-end market, it is impossible for international manufacturers to enter. Because of this, foreign LED manufacturers and Chinese competitors do not often compete head-to-head.
But this will change. IHS believes that LED sales of Chinese companies will grow steadily year by year along with the growth of China's economy. Therefore, Chinese LED suppliers will start to sell more LEDs internationally and compete with foreign competitors.
Obstacles to entering the international market
Patent issues and product quality issues have always been the two major concerns for international customers when considering purchasing LEDs made in China.
However, several factors suggest these concerns will diminish over time. Expired patents, the history of Chinese manufacturing in other industries, the huge production capacity of the entire industry and the fact that the vast majority of LED lights are assembled in China.
Major LED suppliers Nichia, Osram, Philips and Cree believe that so far Chinese suppliers have very limited influence on their sales performance, especially in the field of general lighting and Europe and the United States. Of course, this situation will not necessarily continue into 2020.
For example, Mulinsen has had a good start in 2014 and is likely to enter the top ten of IHS's LED supplier rankings in the first quarter.
For example, Mulinsen has had a good start in 2014 and is likely to enter the top ten of IHS's LED supplier rankings in the first quarter.
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