Rare earth price increases traditional lighting companies accelerate the deployment of LED

Since 2010, the prices of rare earths, an important raw material for fluorescent lamps (including energy-saving lamps) and LED devices, have risen sharply. The highest increase has reached 124%, and prices are still fluctuating. In this regard, Wang Wanchuan, general manager of Renliang Lighting Appliance Co., Ltd. analyzed that prices of raw materials such as rare earths will continue to rise in the future. Since rare earth is an important raw material for phosphors, and phosphors are used in fluorescent lamps, energy-saving lamps, and LED device packages, the chain reaction brought about by the price increase will surely bring about a greater impact on related industries.

According to statistics, 80% of the world's energy-saving lamps are produced in China. At present, China has more than 3,000 energy-saving lamps and related companies, with an annual output of more than 3 billion energy-saving lamps. It is a veritable global manufacturing center for energy-saving lamps. However, the high-end market is basically occupied by foreign brands such as GE and Philips. Most Chinese manufacturers are in the low-end market, and their profits are low. This time, domestic rare earth prices will inevitably consume a large number of Chinese energy-saving lamp companies would not have high profits. In addition, the continuous turmoil in raw material prices will inevitably exacerbate market risks. Larger companies can still integrate vertically and downstream resources in the industry chain, and even save rare earths to resolve some risks. For small-scale enterprises with weak market operations and weak anti-risk capabilities, the impact will be even greater.

Although rare earth is also one of the important raw materials for LED lighting products, as a newly developed product, the profits of LED lighting are still relatively high, and the basic energy can be more than 30%, and from the cost point of view, although the price of rare earth and metal materials Will increase year by year, but the chip price that accounts for the main part of the cost of LED lighting products will show the declining trend, can offset the price rise factor. Under this circumstance, it is expected that more companies will accelerate the transition to LED lighting products.

In fact, in recent years, most of the traditional lighting companies have begun to invest in the production of LED lighting products, but the intensity varies. However, with the increase in the prices of rare earths and other raw materials, the further intensification of competition in the traditional lighting products market will enable more companies to realize that the transition to LED is a general trend and is expected to accelerate this process. For example, in the LED project, the main lighting company in China, Sun Lighting announced plans to invest about 1 billion yuan this year to develop its LED business. Recently, Sunshine Lighting held a 30.188% stake in Japan LIREN company with 1.237600 yuan, which is an important measure for its LED layout.

However, it should be noted that the price increase of raw materials will certainly bring large companies in the traditional lighting industry into the LED lighting industry, and will also drive more small businesses to join the LED market. At present, the semiconductor lighting industry has faced many enterprises, small scale, and lack of technological innovation capabilities. Most of the enterprises are concentrated in the low-end market, low level of repeated competition and other issues. The accelerated entry of a large number of traditional lighting companies will inevitably make the competition more fierce.

However, this situation can also be understood from another perspective. Raw material prices represented by rare earths have become a general trend. In 2011, raw materials such as copper, iron and aluminum, and glass tubes, and labor costs, utilities, and land rents all increased continuously. . These are the objective factors that drive China's LED lighting companies to accelerate industrial transformation and upgrading. If China's LED companies repeat the past, the traditional lighting industry only focuses on the production of low-end products, and the old path of low profit and low-level vicious competition is no future. Because in the past, the "low-cost labor" environment in which China's low-end processing and manufacturing industries depended on was changing. China's LED industry only hopes to enhance its technological innovation capabilities and accelerate industrial upgrading. In response to a question from Premier Wen Jiabao at the current session of the National People's Congress, "China's revitalization is not only in the total economic output, but also in talent and technological progress." The key to the success of China's semiconductor lighting industry is high-tech talent. The massive training and continuous improvement of the company's ability to innovate. Therefore, from this perspective, the price increase of rare earth may be an opportunity to promote China's semiconductor lighting to a new development path.