The polarization of packaging companies has intensified, and technology has been upgraded into core competitiveness.

In recent days, LED-related listed companies have successively released performance reports for the first half of 2016. From the financial reports released by several companies mainly engaged in LED packaging business, it can be found that the performance of most companies shows "growth".

The revenue of listed packaging companies such as Nationstar Optoelectronics, Hongli Zhihui, Jufei Optoelectronics, and Ruifeng Optoelectronics generally increased by more than 10% compared with the same period last year. At the same time, the gross profit margin of some companies also increased compared with the same period last year.

Hongli Zhihui (300219) achieved operating income of 994 million yuan in the first half of the year, an increase of 43.34% over the same period last year; net profit attributable to the owners of the parent company was 138 million yuan, an increase of 141.60% over the same period last year.

Nationstar Optoelectronics (002449) achieved total operating income of 1,054.5869 million yuan in the first half of the year, an increase of 16.36% over the same period last year; it achieved net profit of 94.6219 million yuan, an increase of 13.23% over the same period last year.

The adjustment of product structure and the highlighting of scale effect are the factors that continue to improve the performance of packaging companies in the first half of the year.

As we all know, the product prices of some LED packaging companies once increased in the first half of the year, which seems to verify the fact that the packaging industry is also picking up.

A polarized pattern has been formed

The LED industry has experienced full competition for a long time, and some disadvantaged companies and their production capacity have gradually withdrawn from the market. As overcapacity continues to be cut, the price decline of industry products has slowed down, cross-border mergers and acquisitions have occurred frequently within the industry, and the market share and competitiveness of industry leaders have been strengthened.

Many people in the LED industry have said that the current situation of Evergrande, the largest packaging company, has been formed.

"As labor costs increase day by day, the improvement of automation will become more and more important. Therefore, automation transformation and upgrading has become an inevitable trend." The continuous optimization of automation equipment can drive further reshuffle of the industry, thus forming a pattern in which the strong are stronger and the big are everlasting.

At the same time, various packaging factories are accelerating the layout of automated production lines, especially for some new packaging structures and processes.

Compared with semi-automatic production lines, fully automatic production lines have certain advancements in using scale to reduce costs and improve product stability. Using self-programmed dispensing programs, the efficiency and yield are greatly improved compared to manual or semi-automatic dispensing.

The era of "negotiating prices will change" is over

Price has always been a very sensitive topic in the LED industry, and there was even a phenomenon of "disadvantaging prices when negotiating" in the industry. The same is true for LED packaging prices, which have been declining at a rate of 50% in previous years. Many packaging companies cannot follow the industry development trend and "die out" in the fierce market competition.

Entering this year, the packaging market has gradually returned to rationality, product price reductions have slowed down significantly, and competitive pressure among enterprises has also decreased.

Same quality competes with price, different prices compete with quality. "The era of price wars has passed, and the market is returning to rationality. We use imported components from Germany, Japan, Switzerland, Taiwan, etc., and focus on making a few products to achieve high-demand standardization and ensure product quality."

Technology upgrades into core competitiveness

In recent years, the advancement of domestic LED equipment has accelerated the process of LED localization. In this process, the midstream packaging equipment field has become a model at the forefront of localization.

Nowadays, as the localization rate of packaging equipment is getting higher and higher, the pattern of some subdivided product fields has been established, and the competition space left for equipment manufacturers is also shrinking.

If a company cannot correctly grasp the development trend of LED packaging technology and make reasonable arrangements for technology development and process innovation, it may not be able to develop new technologies and products to continue to meet customer needs.