In July, the climax of the collapse, LED companies need to put a good quality to overcome difficulties
The sunny July is like a curse of LED people. After the product was illuminated and Zhongzhou Optoelectronics was exposed to bankruptcy, on July 11, Ruigu Technology (Shenzhen) Co., Ltd. also announced bankruptcy liquidation. On July 19th and 20th, Delip Optoelectronics and Zhongshan Tongji Technology Lighting successively reported the bankruptcy liquidation.
Although the industry reshuffle is nearing the end, the situation of Evergrande, the big LED industry pattern, has been established. The big companies invest in M&A and play, but the news that several LED companies have closed down in succession in January is still awkward. This also reveals the fact that the profit behind the LED industry is hard to earn.
LED industry collapse
In summary, the reasons for the closure of several companies are mostly due to the break of the capital chain. The reason for the bankruptcy given by Ruigu Technology is the economic downturn, the manufacturing operation is difficult, and it is helpless to get involved in the tide of closure. Zhongshan Tongji Technology Lighting was unable to pay due to poor management, and the company’s employees were unable to pay more than six million yuan. Delip Optoelectronics said that due to overcapacity and industry triangle debt, the company's capital turnover was difficult, and it was decided to clean up and convene suppliers to declare and liquidate claims.
In the past few years, with the influx of capital, the LED industry has been oversupply. The industry's technology has a relatively low gold content, and the industry has entered an era of low prices and scale. However, the development model of fighting low prices and scaling requires huge and sustained financial support. Once a certain block of funds is blocked, the entire development model will fall apart and enterprises will be in danger. In particular, small and medium-sized enterprises, without good financial reserves and business strategies, are more likely to face the risk of bankruptcy.
Large enterprises reduce costs through scale, coupled with brand effects, compatible with mergers and acquisitions to expand the industrial layout, can still occupy the market and gain profits. However, if SMEs cannot stand on the product itself, grasp the quality, and establish their own core values, they will be easily eliminated by the market.
After several years of rapid development, the LED industry has entered the final stage of reshuffle, and it is expected that more LED companies will be forced to withdraw from the market this year. The reason is that there is no mastery of key links and core technologies; blindly investing in vicious competition in price wars; company decision-making mistakes, blind expansion, and rising operating costs are all likely to become the last straw for crushing LED companies.
However, industry shuffling does not mean the death of the company. In today's industry reshuffle, it also brings more opportunities for mergers and acquisitions to small and medium-sized LED companies.
In June of this year, Shenzhen Liangbaijia Electronic Technology Co., Ltd. also encountered difficulties in the capital chain break, but the business owners did not abandon and did not give up, actively communicated with suppliers, and obtained support from a number of supply chain members and agents. According to the news on July 22, Liangbao's high-quality brand resources have been favored by Yunnan Guoding Investment Co., Ltd., and the two parties will reorganize and jointly establish a joint venture company.
According to Yunnan Guoding Investment Co., Ltd., the investment of Liangbaijia is to use the brand window to integrate the high-quality resources of the lighting industry, and promote the monopoly position of Liangbaijia in the single product, and at the same time, rely on the industrial chain resources of Guoding to promote more A standardized light source type of product competes to become a strong brand.
As an institution specializing in equity investment under the Yunnan State-owned Assets Supervision and Administration Commission, Yunnan Guoding Investment Co., Ltd. has many layouts in the energy-saving and LED industry chain upstream, and is building an industrial chain with monopoly capabilities. With the capital of Malaysia, Bright 100 can turn around and recreate its glory.
In addition, Zhongzhou Optoelectronics, one of the largest LED manufacturers in East China, has also reached the stage of bankruptcy restructuring due to strategic financing mistakes. Fortunately, its filament lamp technology and resources still have value. On July 18, it was acquired and restructured by Lierda Technology 40 million yuan.
The acquisitions of the two companies show that LED companies have their own core technologies and superior resources, which are valuable at all times. Even if it encounters bankruptcy, it is still possible to turn around again.
Looking back at the current LED industry, the big waves are getting gold. It can also stand firm in this industry, and it is a conscience enterprise that insists on quality and reputation. As the saying goes, people don't believe in it, and they don't believe in it. Today, in the LED industry's high growth and decline, LED companies must adhere to the bottom line and work together to create a benign ecological environment in order to usher in the spring of the industry and the spring of the self. I hope that the industry will be less impetuous and more persistent. Here, I would like to praise those LED companies that still stick to the industrial manufacturing industry! Especially those LED SMEs, more worthy of respect!
Article source - China Semiconductor Lighting Network
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