Reduce costs, build automation lines, supply chain synergies, how LED bulbs go out of the "price war" haze

Faced with the deep adjustment period of the LED lighting industry, the company has adjusted its strategy around the strategy of different types of lighting products. In particular, the incandescent lamp entered the final elimination period, and the LED bulb lamp industry, which is dominated by the traditional replacement market, ushered in a new round of market demand explosion.

According to the latest data from the High-tech Research Institute LED Research Institute (GGII), the output value of China's LED lighting market in the first half of the year was 212.7 billion yuan, which is expected to reach 457.6 billion yuan, a year-on-year increase of 15.35%.

It is estimated that by 2018, the LED penetration rate will be close to 90%, and the LED general lighting market will also be basically settled. Among them, the market size of replacement light sources represented by bulbs and lamps will show a rapid growth trend in the next few years.

And in the past, the market is not standardized, the competition is disorderly, and the policy is gradually overweight.

According to the “Regulations for the Implementation of Energy Efficiency Labeling for Non-Directional Self-ballasted LED Lamps for General Lighting” issued by the National Development and Reform Commission, starting from October 1, 2016, non-directional self-ballasted LED lamps for general lighting (commonly known as LED bulbs) Lights) will have to be affixed with an energy efficiency label to be available for sale.

According to the requirements of the "Rules", the detection of LED bulbs needs to be illuminated for 1000 hours.

Complete the test report of the LED bulb and provide materials for filing on the China Energy Efficiency Labeling Network.

Zhang Hong, general manager of the incentive test, said that in fact, the US and European markets have already added energy efficiency labeling requirements when the LED bulbs first entered the market. The US market is the lighting facts label, and the European market is the ERP label.

Although the addition of the energy efficiency label will not have much impact on the sales of LED bulbs, it will undoubtedly set a certain threshold for market access.

Pure play price, always have to be eliminated

In recent years, the sales volume of LED bulbs has increased rapidly, and the market share has been expanding. However, the market competition has become increasingly fierce. The price of LED bulbs has shown a downward trend.

And the price war in recent years is not just in the Chinese market.

In the first half of last year, Philips has significantly reduced the price of LED bulbs in the North American market.

In September this year, Philips Lighting once again offered a price killing in the Indian government's public LED bulb bidding project, and participated in the bidding with a 9W LED bulb with a price of only 0.57 US dollars (about 3.8 yuan).

Behind this is the process that many companies must go through in order to gain market share. The difference is that some companies have come over, and some companies are unfortunately squeezed out.

Lin Liliang, executive general manager of Mulinsen, once said, "The price war has to be played, especially last year, if you don't fight the price war, you will go out directly, and even the market share is gone."

Since the beginning of this year, as the overall LED market has gradually recovered, some manufacturers' orders have gradually become full, and the prices of upstream raw materials have stopped falling, which has made the price of bulbs generally stable.

"At present, the number of LED bulbs is exploding, and the market has entered a period of rapid growth. In the reshuffle stage, more and more manufacturers will be eliminated due to price wars," said the relevant person in charge of Lidaxin.

Rieter is currently the largest OEM of LED bulbs in China, with an average monthly shipment of more than 25 million units, and its production capacity continues to expand. The products are mainly exported to Europe and the United States and other countries or regions.

Compared with companies that rely solely on the scale of production capacity, Rieter has long been aware that the core competitiveness of products lies in technology. Whether your product is selling a few dollars or tens of dollars.

In the past few years, some companies that have a certain single-product capacity advantage have been dragged into the quagmire of the capital chain break due to pure price competition.

The reason why enterprises cannot survive is that they do not respect intellectual property rights, have no ability to innovate, and products are not competitive. Therefore, many large factories focus on the layout of patents, and truly use market-based means to regulate the market and squeeze competitors.

“Ridaxin has always paid great attention to the layout of patents, which is to expect the market to be more standardized and orderly. At the same time, we have also made a lot of layouts in the whole lamp design, material application, optical layout, drive design, etc. It is to protect our customers and to ensure that we can lead the market." The above-mentioned person in charge of Lidaxin told Gaogong LED.

Breakthrough in the "post-price war era" shuffling tide

As a result of the price war, capacity orders are shifting to more competitive companies. How to make strategic adjustments is a wise move.

In particular, the LED bulb products on the market are mixed, and the prices are different. Under this market environment, enterprises only continue to dig deep into technology, strictly control quality, and expand effective and high value-added production capacity to enhance their competitiveness.

Wu Qinghui, chairman of Dongbei Optoelectronics Co., Ltd., the largest LED bulb manufacturer in Taiwan, revealed that “Dongbei will adjust the production capacity ratio of existing products and reduce the production capacity of conventional LED bulbs, which will lead to more profitable protection. LED lighting products. At the same time, it is also to be able to distinguish from the "low price" market of bulb manufacturers in mainland China."

According to the plan, Dongbei Optoelectronics will reduce the current monthly production capacity of 10 million LED bulbs to 3 million. Wu Qinghui said, "This will directly lead to the bulb business that currently accounts for 60% of the company's lighting business revenue, down to around 20% in 2017."

The relevant person in charge of Lidaxin expects that “the price war will continue in the next two years, but the market will gradually standardize, the market share of the big manufacturers will increase, the transfer of orders to the big factories will become more and more obvious, and the price will gradually It is gentle."

But the market cake is getting bigger and bigger, and there is no doubt about it.

With the important point of the elimination of incandescent lamps approaching and the market acceptance of LED lighting products becoming more mature, in 2016 China's urban lighting will usher in a wave of replacement LED lights.

According to the latest data from the High-tech Research Institute LED Research Institute (GGII), the cumulative production of incandescent bulbs in the first half of 2016 reached 2.012 billion, and most of the incandescent products were withdrawn after October 1.

According to the current market price of LED bulbs replacing 15W and above incandescent lamps, an annual replacement demand of nearly 50 billion yuan will be added.

“From the perspective of global market demand, the application of bulbs is the most extensive, because non-directional lamps can be used in a variety of lamps.” Zhang Hong mentioned.

Then, how to balance the market demand and cost control requires the enterprise to deeply explore the synergy effect of the supply chain and the upgrading and upgrading of the production line.

Everlight Electronics strives to maintain a stable and profitable lighting product line. Last year, the ex-factory price of bulbs has dropped to 0.95 US dollars, and this year it has dropped to about 0.6 US dollars.

According to the relevant personages of Everlight Electronics, "through the cooperation with the power supply and cooling plant to effectively reduce the cost of the bulb lamp, Yiguang can still make money in the lighting market under the price decline trend."

In addition to benefiting from the increased penetration of global LED lighting, Dongbei said that it is actively redesigning its light bulb design, and the company will reduce costs by cooperating with other supply chains.

In addition to the possible cost reductions in the supply chain, automated production is undoubtedly another important kinetic energy. “Production of an LED bulb in 3 seconds” has now become a reality in automated production lines.

According to Guan Yong, general manager of Sunshine Lighting, “automation has a great relationship with product maturity and batch size. The expansion of production capacity is not an increase in the number of simple personnel. Sunlight lighting is effectively promoted in order to strengthen the guidance of per capita output value. Automated transformation has been introduced in many types of products and various process steps."

As one of the largest domestic LED lighting products, Lidaxin has more than 40 automated LED lamp light assembly lines.

Based on the advantages brought by R&D, as early as 2013, Rieter established the Intelligent Manufacturing Department and developed the first LED automatic production line in China, with more than 10 invention and utility model patents.

The relevant person in charge of Lidaxin said, “The next step will continue to develop 10 LED automatic production lines of various specifications, design and produce 100 industrial robots with more than 4 axes, and make the entire factory automation production capacity reach 70%, and the annual output of LED lamps will break through. 300 million."

In addition to Sunlight, Lidaxin, as well as Op Lighting, Foshan Lighting, NVC Lighting, Sanxiong Aurora, Mulinsen and other lighting manufacturers have implemented large-scale production.

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