Table 1: Changes in inventory of LED listed companies in the third quarter Buffet Server,Household Restaurant S.S Buffet Server,Heated Buffet Server,Kitchen Buffet Server Shaoxing Haoda Electrical Appliance Co.,Ltd , https://www.hotplates.nl
But most people think that this is not the best period, nor the worst period. LEDs are in the spring of development and winter is far from reaching.
Inventory risks increase, companies are trapped in financial difficulties
According to the incomplete statistics of the High-tech LED Industry Research Institute, from January to September, the inventory balance of LED listed companies was high, and both indicators showed significant growth both year-on-year and quarter-on-quarter. (See Table 1) 
Data source: Gaogong LED Industry Research Institute
Among them, the upstream listed companies have the largest inventory balance, of which Sanan Optoelectronics' inventory balance and year-on-year growth rate are ranked first among all LED listed companies. The company's total inventory is close to 1 billion yuan, which is nearly four times the year-on-year growth rate. The growth rate of the balance of the same inventory of the same upstream is also doubled, reaching 138.4%.
Although the upstream faces huge inventory pressure, it cannot be easily shut down. "Because you can't stop production, if you stop production, and then start up, the quality of the product should reach the original level, it may take 3 months. And the customer's process of LED chip certification is very long, the packaging factory's products are sold to the end customer, the terminal The customer will go to the certification again, which will take 3 months to 6 months.†Wang Lianghai, vice president of Tongfang Co., Ltd., told the Gaogong LED reporter.
"Everyone doesn't want to stop, they want to use the price to lower the price," said Zhang Xiaofei, director of the High-tech LED Industry Research Institute. As a result, the price of the chip has dropped rapidly, and the chip price is expected to continue to fall at the end of the year.
According to a survey conducted by the High-tech LED Industry Research Institute (GLII) on the ex-factory prices of 25 LED chip companies in China, the average price reduction of domestic chips has been much higher than that of imported chips this year, with an average price reduction of 20.15%. The average price reduction is only 10.78%; the price of chips imported from Japan, Europe and America is only 5.18%, and the price reduction of chips in South Korea and Taiwan is 12.48%, and some are 16.68%.
"Inventory backlog, coupled with the huge capital expenditure of domestic upstream enterprises to purchase MOCVD, the company's cash flow has deteriorated." Zhang Xiaofei revealed, "But now some of the extension manufacturers' financing still faces many difficulties. On the one hand, manufacturers need money to buy machines. But if you really buy equipment and don't make any money, investors will question why your production did not produce corresponding profits. On the other hand, manufacturers need a certain amount of cash flow, but they cannot finance it. The profitability of the extension manufacturers is relatively poor. If investors give funds, they will ask when the manufacturers can make profits. This is very painful."
Bundling cooperation to resist the cold current
"Although the current environment is not good, I have never regarded it as the winter of the industry." Zhang Xiaofei pointed out that the industry is too impetuous now, and a revolutionary industry replaces the old industrial cycle for about ten years, including technology and capital. Prepare first, time will be sufficient to find a partner, no technology and capital will be shuffled.
“The methods adopted by different enterprises are different, they are biased towards national resources, some rely on their own core technologies, and they rely on capital. My idea is that all three aspects are indispensable, plus one condition is cooperation,†Zhang Xiaofei said. .
However, the current status of the LED industry is that the industry is scattered and mixed, and the enterprises tend to vertically integrate the industry chain, which is known as “cost savingâ€. As everyone knows, the industrial chain has a long history, and the technologies, management and cooperation methods are facing enormous challenges.
“Every company has its own strengths, not necessarily in the middle and lower reaches, and will face the embarrassing situation of competing with customers, unless the product line is different,†said Gu Daoxiong, president of Shenzhen Changyuntong.
"Enterprises are very impetuous, and the industry lacks patience. At present, the most urgent task for enterprises is to do a good job in product, technology, and brand, and to find cooperation partners and bundle them together." Gu Daoxiong believes that group fighting is an inevitable choice to resist the cold current.
Traditional lighting is the biggest enemy
In order to seize market share, companies are eager to grab low prices. The gradual decline in the prices of products in the upper and middle reaches is stimulating the market for downstream lighting applications. Zhang Xiaofei expressed reservations. "The decline in the price of sapphire and chips will not have a big impact on the price of the terminal. The biggest impact should be the improvement of technology, the doubling of light efficiency and the price drop by half. This is where the market can be truly bigger and healthy and sustainable. The key. "The current price war, low price grab the market, will only make the LED lighting products worse and worse, at the same time, will also blow the consumer's confidence.
"Technology to improve the quality of qualified products, pure price war will lead the lighting industry into astray," Zhang Xiaofei said, those companies that tend to fight price wars, in order to control costs, often use the cheapest materials, product quality is worrying. Such companies will eventually be eliminated by the market.
At the same time, there is a problem in LED companies, that is, the focus of competition is on LED companies in the same industry. Compared with their light efficiency and scale, they ignore the competitive pressure of traditional lighting companies on LED companies. They are the biggest. The biggest competitor of LED companies.
At present, LED lighting penetration rate is less than 1%, while other market shares are dominated by traditional lighting, which is light and heavy, at a glance. "Now the LED company's defined product targets are mostly compared with A's LED companies. Compared with B's LED companies, although the investment is much higher, the price of LED products has dropped a lot, but even if there are channels, the products sold are still very few, most of them. Enterprises still do not regard traditional enterprises as their main competitors." Zhang Xiaofei pointed out that LED enterprises are blind to competition.
Zhang Xiaofei warned that companies should not make the shop too wide, because no company now makes the whole line of products very beautiful. LED companies can refer to the practice of traditional lighting companies. Traditional lighting companies are stronger and bigger in a certain market segment. For example, the ceiling lamp starts from the home and then slowly expands. The positioning of the product is very important.
Regarding the penetration rate of LED lighting, Zhang Xiaofei pointed out that the penetration in the early stage was relatively slow, and it reached a certain period. As the quantity increased, the cost was reduced. After the consumer acceptance was greatly improved, the penetration rate of LED lighting would be accelerated. It is now in a state of glue, and it is repeated. Zhang Xiaofei expects the penetration rate to exceed 30%, and the growth will be greatly accelerated. 
Stock highs intensify the risk of LED companies to fight against the cold current
[High-tech LED news / reporter Hu Yanling] The LED industry is experiencing a cold current, and the tide of bankruptcy caused by the multi- legged is spreading across the country. At the same time, LED enterprise stocks are high. According to the third quarterly report, the inventory of LED listed companies is surging, and the highest growth rate is nearly four times.