Will The LED Be All Right In The Future?

- Jul 02, 2018-

You must have heard the news that Osram is selling and selling again. (LED Bulb)

News of GE's recent exit from Asia and Latin America has only just faded. (LED Bulb)

Earlier this year, Toshiba quietly sold its lighting business in China to kangjia. (LED Bulb)

And the sale of Lumileds, a much-hyped Philips LED device company, was blocked. (LED Bulb)

So far, the traditional four lighting giants, in their respective positions, want to change the curtain, or, is it the curtain call? (LED Bulb)


You must have heard that more than one Chinese LED listed company has announced its transformation.

I don't know why, they did education. (LED Bulb)

You also hear from time to time about a Chinese LED - related company going out of business. (LED Bulb)

Employees block white banners for pay, and suppliers block news of factories almost every other month or two.

It is said that LED has been ruined by China, which has no bottom line in quality and disorderly price competition. (LED Bulb)

The same people are reduced to the ends of the earth, landowners have no surplus food, the proletariat is also suffering. (LED Bulb)


How did this happen?

The LED industry, which sparkled yesterday, is now falling to the ground. (LED Bulb)



LED, will the future be all right?


The underlying logic of industrial distress


You blame the practitioners and say they are dishonest. (LED Bulb)

You blame the industry and say it's too competitive. (LED Bulb)

You blame the country for the lack of standards. (LED Bulb)

All right.


Behind the motion of a planet is Newton's law of gravity. (LED Bulb)

Behind the evolution of biology is the inheritance and variation of genes. (LED Bulb)

What is the underlying logic behind the woes of the LED industry?

Try to use this perspective, starting from common sense, to explore the underlying logic and internal contradictions, and answer this question. (LED Bulb)


1. Excessive product performance


The bulb lamp of a certain brand, 2 pieces of 14 pieces of 9 wool, the marking life is 15,000 hours.


What is 15,000 hours?

Two hours a day for 20 years, four hours a day for 10 years. (LED Bulb)

That is, you bought 20 LED lights from ikea for 150 bucks today,

The next time you buy it, 10 years from now. (LED Bulb)

The single purchase amount is too small, the second purchase time is too long!

LED performance excess, and secondary purchase cycle, is an inherent contradiction in the industry.


There are also many LED lights that last well over 15,000 hours.

The family is decorated about 10 years, redecorated the lamp is not broken, good too.

You said commercial lighting might be different. (LED Bulb)

In a 16-hour day, 17,500 hours in three years. (LED Bulb)

General business place also wants 3 years to decorate. (LED Bulb)

Moreover, many stores are less than three years old. (LED Bulb)

Excessive LED performance and service life are another contradiction in the industry. (LED Bulb)


As a result, consumers would rather buy nearly cheaper lights than older leds. (LED Bulb)

Consumers are willing to pay for low prices, not for excess longevity. (LED Bulb)

Do not blame the bad business, the compression cost production of short - life LED lighting, this is the market demand. (LED Bulb)


This also explains by the way, the life of LED filament lamp is less than half that of LED bulb bulb lamp, unexpectedly the market is very hot. (LED Bulb)

Because it satisfies people's demand for the appearance of incandescent lamp inertia, life is three times as long as incandescent lamp, enough. (LED Bulb)


LED excess performance is not the general lighting market demand. (LED Bulb)



2: overcapacity


The price of LED products drops by 20% every year. How does this happen?

You said, this is the result of the industry chain squeezing each other.

Lamp manufacturers squeeze LED upstream manufacturers, upstream manufacturers squeeze upstream.

Price reduction, payment days, the whole industry chain is tight, miserable.

What is the reason for the chain of industry to fall in love with each other?


The fall in prices, back to the common sense of economics, is that supply exceeds demand.

The LED industry is oversupplied, not because of falling demand.

The market for light, the trend is up.

The fundamental reason is that technology is advancing faster than demand.

Semiconductors have Moore's law, leds have Haizt's law.


Haitz's law: the price per lumen falls to 1/10 every 10 years.

The luminous flux of a single device increases 20 times every 10 years.


From materials to equipment technology, advances in technology drive Haitz's law.

If you look at the LED industry, it's highly automated, and few other industries have that level of automation.

LED was born at the right time. Since 2006, he has been living through the rapid growth of puberty, eating automatic household barrels.

There is no historical baggage of non-automation in the traditional semiconductor industry.

From LED chips to packaging to whole lamp production, high automation has been achieved.

Imagine a solid-state machine hitting a chip every quarter of a second, waving a robotic arm.


The result of high automation is that increased capacity is a matter of money.

Moreover, the unit time capacity (UPH) of the machine is also increasing at a certain rate.

The competition of LED industry is actually the competition of machine.

Industry concentration is a trend, because machines have economies of scale.

Small and medium-sized companies will continue to fail, not by losing to rivals, but to machines.