In order to improve the quality of LED lighting subsidies’ beneficiaries, China’s National Development and Reform Commission plans to restart the bidding for the SSL Lighting Product Subsidy. On July 25-26, the commission will accept withdraws from companies that have entered the bidding in February, which is good news for Taiwanese upstream and midstream LED firms.
The new bidding forbids companies to jointly bid, which is good for large-scale companies and will help keep the bidding price and the quality close, and therefore, Taiwanese companies with focus on the upstream and midstream will have an edge in the bidding. It is estimated that the subsidy amount for the new bidding may amount to at least RMB 1 billion.
LED-related stock prices began to rebound since last week – aside from Everlight (2393) stock price dipped 0.74%, stock prices of Epistar (2449), Lextar (3698), Unity Opto (2499), Formosa Epitaxy (3061) and Genesis Photonics (3383) have seen increases in the past week. In particular, Epistar’s stock prices went up 4.24% in the past week, the strongest among the peer companies.
LED and solid-state lighting industries are one of the major focuses of China’s 12th Five-Year Plan. However, many small traditional lighting companies recently transformed to LED lighting firms, and alone they could not meet the standards of the bidding. As a result, certain small companies cooperated and bade jointly, which resulted in a huge gap between their bidding prices and their product quality.
Hence, Ministry of Finance of the People’s Republic of China, National Development and Reform Commission and other government agencies decide to start a new bidding. Taiwanese LED lighting, LED package and epitaxy makers believe that the new bidding will help restore the order in the LED industry and prevent the irrational price cuts by the companies that win the bidding. More importantly, it can help simplify the supply chain and maintain the quality.
According to LEDinside research, the new bidding will include outdoor lighting products such as LED street lamp, LED tunnel light and indoor lighting produtcts such as LED down light, self-ballasted LED reflector lamp. Now the new bidding is open for companies who meet the standards to apply. The process is expected to speed up and the subsidy amount may further increase.
