Thanks to years of policy subsidies, LED lights have quickly replaced traditional incandescent light sources, illuminating countless homes with their energy-efficient and environmentally friendly advantages and affordable price. The industry's 13th Five-Year Plan also holds high expectations for this product beneficial to both the nation and the people, aiming for a trillion-yuan output value by 2020.

　　Subsidies have driven rapid industry development but have also become a pain point for sustained and healthy growth. What will happen if subsidies are reduced? Will prices remain affordable?

　　Examining the benefits for the nation and the people: A look at the bright future of LED lights

　　Semiconductor lighting, including light-emitting diodes (LEDs) and organic light-emitting diodes (OLEDs), features low power consumption, long lifespan, and rich colors, and is hailed as a "world-class technological revolution in the lighting field."

　　In just a few years, LED lights have become the "main character" in China's lighting market. This is a testament to the strong driving force of technological innovation and the broader trend towards energy efficiency and environmental protection.

　　The Electric Power Research Institute of America has done some calculations: an LED light with the same brightness as a 60-watt incandescent bulb, used for 10 hours a day, consumes about 30 RMB annually, while a 60-watt incandescent bulb consumes 160 RMB annually.

　　According to data from the National Energy Conservation Center, lighting electricity consumption accounts for about 14% of the nation's total electricity consumption. This is a major reason why the government is vigorously promoting the use of LED lights.

　　Through the implementation of the "Energy-efficient Product Benefitting the People Project," China has successively promoted 780 million LED energy-efficient lighting products nationwide in recent years. The public has not only enjoyed tangible benefits but has also made significant contributions to energy conservation and environmental protection.

Development bottlenecks emerge, subsidies cause enterprise dependence

　　Policy support and widespread awareness of energy conservation and environmental protection have enabled the rapid rise of the semiconductor lighting industry in China. China has now become the world's largest producer, consumer, and exporter of semiconductor lighting products. In the past 5 years, China's semiconductor lighting output value has grown at an average annual rate of around 30%.

　　However, it is undeniable that the rapidly developing semiconductor lighting industry is gradually showing "bottlenecks," with high subsidies causing enterprises to become dependent.

　　Based on an estimation from reviewing annual reports and public information of some listed semiconductor lighting companies, it's found that some leading domestic enterprises have received subsidies of hundreds of millions of yuan, generally named as "special funds for technological research and development," "equipment subsidies," and "quarterly industry subsidies." Some companies have received up to 2.5 billion yuan in subsidies over the past 5 years, with subsidies accounting for more than half of their net profit in some years.

　　Local governments also mostly use subsidies to encourage the semiconductor lighting industry. Guangdong Province's 12th Five-Year Plan for the development of strategic emerging industries proposes a financial investment of 22 billion yuan to support the development of strategic emerging industries including semiconductors. Nanchang's newly-introduced policy to promote the development of the LED industry provides financial assistance of 30% of the invoice amount for equipment purchases for each industry's R&D and testing public service platform.

　　Some experts lament that government subsidies were originally intended to promote LED lights and help capable enterprises. However, some enterprises have become dependent on policies, and subsidies have become their main source of profit.

　　Some enterprises blindly expanded production capacity after receiving subsidies, resulting in overcapacity, frequent price wars, and lack of focus on R&D... In 2015, the LED industry experienced a "cold winter," with nearly 4,000 small and medium-sized enterprises closing down.

　　Seeking breakthroughs in key technologies, huge market potential remains untapped

　　According to the "13th Five-Year Development Plan for the Semiconductor Lighting Industry" issued by the National Development and Reform Commission and other departments, the industry is expected to reach an output value of 1 trillion yuan by 2020. How can this trillion-yuan output value be achieved? Industry experts say it depends on the continuous release of market demand, but it cannot solely rely on subsidies to maintain low market prices. Once subsidies are reduced, what will happen to the industry?

　　Since last year, some regions have shown signs of reducing subsidies for the LED industry. If enterprises raise LED light prices to make up for the "deficit," will the market accept it? Therefore, the industry needs to plan ahead.

　　At the 14th China International Semiconductor Lighting Forum, jointly organized by the National Semiconductor Lighting Engineering R&D and Industry Alliance and other organizations, experts called for accelerating the cultivation of innovation and competitiveness in China's semiconductor lighting industry. Only in this way can we gain market dominance.

　　In the view of some industry insiders, China still has a considerable gap with developed countries in high-end lighting technology, product innovation, equipment manufacturing, and market applications. The previous lawsuit filed by Philips Lighting against Chinese lighting companies exposed the lack of core technologies in domestic companies.

　　Liang Weidong, head of investment business at international investment firm IDG Capital, believes that the industry is still expected to continue growing in the next 5 years. Automotive, agricultural, and medical lighting hold tremendous potential.

　　Experts say that in the next step, China's semiconductor lighting industry should seek breakthroughs in key technologies and, through the expansion of application fields and continuous regulation of the market environment, maintain its market advantage, making the trillion-yuan output value goal achievable. The future of the semiconductor lighting industry remains bright.