The current leader in LED lighting in time to enjoy the high-margin, but the experience of international companies, the future of the industry reshuffle and the gross margin decline is a trend, the future winner of the industry should have a cost advantage, quality of patents and customer relationship firms.
Rise in the Korean LED Corps. In recent years, with the Samsung LED, LGInnotek and Seoul Semiconductor and other manufacturers have emerged, the status of South Korea’s LED industry has been rapidly rising in Asia, as Japan, Taiwan, strong competitors. Among them, the Korean government played a very important role, and its the one hand, top-down driven government forces Samsung, LG and other large groups directly into key industries, on the other hand issued a series of policy support, such as the “universal plan 15/30 , “” green growth national strategy “and” green LED lighting popular development programs “, etc., led the Korean LED industry downstream overall rapid growth.
Industry’s current boom at the bottom. Our research Seoul Semiconductor is the world’s fourth largest, South Korea’s largest LED manufacturers, the packaging products used in TV backlighting and lighting. Year’s third quarter results and the chain have dropped sharply, mainly due to significantly reduced demand for TV backlighting and a substantial decline in ASP, and the other due to the global economic downturn, although a slight increase in LED lighting, but overall lower than expected.
LED backlight outlook is not optimistic. Industry growth peak has passed, by short-term decline in market demand TV, Edge LED backlight makes the amount of reduction, and ASP decline in long-term alternative is AMOELDTV and TV works, such as Samsung and LG are doing the impact of vertical integration chain, professional LED backlight plant had a hard time. Future to look forward to is the proportion of direct type LED backlight to enhance Seoul Semiconductor said they have already mastered, and the CCFL cost about the same thickness and edge-type program.
LED lighting is the focus of future development. 11 years this market has been very good, but fast enough, the next promotion with the following factors: 1) price and income levels, high levels of high-income price promotion place quickly; 2) light price, technological progress has brought light price cost reduction; 3) government policies, one forced out of incandescent and fluorescent restrictions, and second, subsidies, and from the public, commercial lighting to the civil;; 4) unexpected events, such as Japan after the earthquake LED sales increased dramatically.
Investment Implications. 1) the grasp of government subsidies is a key investment theme of the LED industry, Korean LED industry with strong government policy support and boosting the local terminal chain are inseparable; 2) light field outlook is not optimistic, Although domestic only just started, but the future of Taiwan and South Korea will face excess capacity and TV factory backlight vertical integration process, as well as long-term threat of OLEDTV; 3) the prospect that domestic LED plant lighting, lighting from the huge demand and fully distributed the market.
But the market remains to be seen starting speed, the current leader in LED lighting has the time to enjoy high margins, but the experience of international companies, the future of the industry reshuffle and the gross margin decline is a trend, the future winner of the industry should is the cost of ownership advantages, patents, and excellent customer relationships based companies.
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