Market space shrinks, mergers and closures surge, LED industry reshuffle intensifies
Published Time:
2021-08-03
Recently, listed LED companies have successively announced their 2017 interim performance forecasts, with many showing steady growth. While the overall LED industry is on an upward trend, market space is shrinking and competition is intensifying. Since 2017, mergers and acquisitions in the LED industry have been frequent, and closures have been continuous, accelerating industry restructuring.
Recently, listed LED companies have successively announced their 2017 mid-year performance forecasts, with many showing steady growth. While the LED industry as a whole is on an upward trend, market space is shrinking, and industry competition is becoming increasingly fierce. Since 2017, mergers and acquisitions in the LED industry have been fluctuating, and closures have been continuous, intensifying industry restructuring.
Mergers and acquisitions fluctuate
Currently, the LED industry has entered an era of meager profits. Against the backdrop of excessive market competition and overcapacity, LED industry integration is accelerating, and mergers and acquisitions are frequent. Mergers and acquisitions, as a simple and quick development path, are favored by many LED companies. Through mergers and acquisitions, some companies are expanding vertically, carrying out LED full-industry chain layouts; some companies are extending horizontally, going global; and some companies are exploring new fields and exploring different development paths.
Since 2017, mergers and reorganizations in the LED industry have continued. According to incomplete statistics, there have been more than 30 mergers and acquisitions related to the LED field so far. Mergers and acquisitions cases are constantly being staged, and the forms of mergers and acquisitions are diversifying. In addition to mergers and acquisitions in the upstream and downstream of the LED industry chain, they are also constantly extending their tentacles to other fields such as education, media, and the Internet.
On July 26, Zhuming Technology plans to acquire 60% of Aija Lighting's equity; on August 15, Zhuming Technology plans to acquire 60% of Tsinghua Kangli's equity; on August 16, Zhuming Technology acquired another 26.68% stake in Hangzhou Bayan; on September 4, it plans to purchase 100% of Xihe Optoelectronics' equity. To accelerate the company's expansion in the LED lighting business, Zhuming Technology has undertaken a series of acquisitions.
In addition, LED companies such as Mulin Sen, Huacan Optoelectronics, and Feile Acoustics are also leveraging overseas mergers and acquisitions to boost their strength and enter the international market.
Chart 1: LED industry mergers and acquisitions since 2017
Closures continue
Entering 2017, the overall LED market is doing well, and many LED companies are developing and growing. However, some LED companies are not optimistic, some are gradually divesting their LED businesses, and some are directly going bankrupt.
At the beginning of 2017, Wang Gongjie, the legal representative of Fotes Lighting, issued a statement on the bankruptcy liquidation of Fotes, making Fotes the first LED lighting company to go bankrupt in 2017. Fotes Lighting was founded in 2004, mainly engaged in high-quality energy-saving lamps and lanterns such as LED bulbs, LED strip lights, LED downlights, LED panel lights, and LED floodlights, with sales networks covering more than 90 countries and regions worldwide, including Europe, Asia-Pacific, the Middle East, Africa, North America, and South America. Previously, Fotes also invited the movie emperor Liu Qingyun as its image spokesperson, fully building its brand image. The most direct reason for Fotes' bankruptcy was the triangular debt problem leading to a broken capital chain.
Some companies are also gradually divesting their LED businesses. For example, Duofludo plans to transfer its LED lighting subsidiary; Qinshang shares transferred its subsidiary's net assets of nearly 2 billion yuan without compensation; Guangdong Ganghua officially abandoned its LED business due to consecutive years of losses. For a group of companies with small original LED business scales and low-speed growth or even negative growth, divesting LED businesses has become an unavoidable choice.
Chart 2: LED industry divestment and closure since 2017
Growth slowdown, restructuring intensifies
Statistics show that in 2016, China's LED industry's total output value reached 521.6 billion yuan, a year-on-year increase of 22.8%, which is lower than the average annual growth rate of 30% during the "Twelfth Five-Year Plan" period. Among them, the scale of upstream epitaxial wafers was about 18.2 billion yuan, a year-on-year increase of 20%; the scale of midstream packaging reached 74.8 billion yuan, a year-on-year increase of 21.5%; and the scale of downstream applications was 428.6 billion yuan, a year-on-year increase of 23%.
Chart 3: Industrial scale and proportion of each link in the LED industry in 2016 (unit: 100 million yuan, %)
With the continuous deepening of mergers and acquisitions and closures, the restructuring of the LED industry is intensifying. Many companies are submerged in the wave of industrial development, which will inevitably bring a certain impact to the LED industry; but on the other hand, the gradual reduction in the number of companies is also the inevitable result of survival of the fittest in competition. After several rounds of industry restructuring, the LED industry will achieve further optimization and upgrading.
In the view of industry insiders, industry restructuring is a normal development trend, and any industry must go through the process of barbaric growth and optimization and upgrading. Mergers and reorganizations will be the norm, and strategic retreat is also a wise choice.
No. 739, Zhou Shi Road, Hezhou Community, Hangcheng Street, Baoan District, Shenzhen
Copyright © 2025 Shenzhen ETON Automation Equipment Co., Ltd. ALL Rights Reserve.