Dry lighting photoelectric vertical layout channel becomes a constraint factor

On August 7, 2013, the Board of Directors of Ganzhao Optoelectronics reviewed and approved the Proposal on Establishing a Subsidiary for Foreign Investment, and agreed to establish a wholly-owned subsidiary with a self-investment of no more than RMB 60 million.

At this time, Ganzhao Optoelectronics entered the lighting application link downstream of the industrial chain. The intention and purpose are self-evident. After all, no one will sit and watch the biggest piece of cake in the whole industry and cannot share it.

“The establishment of a lighting application subsidiary is optimistic about the current huge LED lighting market prospects.” Lin Zhaohui, deputy general manager and director of the company, said that on the other hand, Ganzhao Optoelectronics has the advantages of technology and capital to further expand packaging and lighting applications. It is also a matter of course.

For the sales channels of lighting applications, Lin Xiaohui said that in the future, the main consideration is to export-oriented, while considering cooperation with large shopping malls, and does not rule out e-commerce channels.

Some insiders said that the ultimate goal of dry photography may be to pursue vertical integration. The five major manufacturers plus the three major Korean manufacturers have basically adopted the strategy of vertical integration, but the degree is different.

However, the most important factor for these large enterprises to adopt the strategy of vertical integration is that these giants have strong downstream applications, and their own mid-stream and downstream packaging and lighting capacity is enough to support the epitaxial chip business. You can enjoy the obvious cost bonus of economies of scale.

Although the implementation of vertical integration has many advantages, it also has high requirements for the enterprise itself, and cooperates with the company's production capacity scale, technology, and financial strength including channels. For most domestic companies, this is not currently the case.

On the other hand, when other middle and upper reaches of the country enter the lighting field, many of them have chosen a joint venture with the lighting manufacturers to rely on the channels of the lighting companies to quickly expand their business.

Since the beginning of this year, many chip manufacturers have chosen to establish a lighting application company with lighting companies to avoid the risks.

Sanan Optoelectronics chose to establish a joint venture lighting company with Sunshine Lighting. Taiwan Jingdian and Hangzhou Yuzhong Gaohong jointly invested RMB 200 million to establish a new joint venture company, Jingyang Lighting Co., Ltd.

The reason for these companies to choose joint ventures is to give full play to the characteristics of the joint venture parties' own technology research and development, production and operation strength, and the advantages of upstream and downstream markets, and truly achieve strong alliance.

The channel has also become the biggest “short board” for the development of the lighting business, especially in the case of self-built lighting companies.

“The channel is the most important reason for the upstream and mid-stream enterprises to choose a joint venture with the lighting factory.” Wu Yongsheng, general manager of Jiangsu Xinguanglian LED Business Unit, said that the lighting industry, especially the traditional lighting transformation LED lighting factory channel layout is relatively perfect, can help the joint venture company products. Quickly enter the market.

Due to the lower barriers to LED lighting, the number of companies producing LED lighting continues to grow, while prices are declining, and competition in the LED lighting market will become increasingly fierce.

“In 2014, there may be overcapacity in the lighting market.” Lin Xiaohui said that the company is worried that the risk is too high and it will delay the rapid expansion.

This uncertainty in lighting applications may be the main reason why Zhan Zhao Optoelectronics has been slow to expand. Although the lighting subsidiary was established, there is still a lot of “homework” on the road of lighting application, and it needs to be complemented.

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