Guan Baiyu: Joint innovation to promote coordinated development of the LED industry chain

Compared with countries such as Europe, the United States, Japan and South Korea, my country's LED industry started late. In recent years, with the strong support of national policies, my country's LED industry has developed rapidly, and industrial supporting facilities have gradually improved. While LED technology continues to make breakthroughs, costs have dropped, and prices have become more and more affordable. In this wave of rapid development, a group of LED companies have seized the opportunity and rapidly grown to become the backbone of the industry. As of now, more than 20 related companies have been successfully listed. Behind this seemingly glorious report card, there are also hidden worries in my country's LED industry. Under the current unfavorable situation in which more than half of LED core technologies and patents are monopolized by a few countries such as the United States, Japan, and Germany, how should my country's LED industry break through the siege, remain invincible in the fierce global competition, and complete the transition from "Made in China" to "Created in China" In this regard, the reporter of "LED Screen World" specially interviewed Ms. Guan Baiyu, Secretary-General of China Semiconductor Lighting/LED Industry and Application Alliance, to talk about the current situation of my country's LED industry and explore the innovative password to defeat the enemy in the face of fierce global competition.

Three major backgrounds of my country’s LED industry in 2014

It is understood that my country's LED industry started in the 1970s. After more than 40 years of development, it has formed a complete industrial chain from upstream epitaxy, substrates, chips, to midstream packaging and downstream applications. Before talking about the current status of my country's LED industry, Guan Baiyu revealed to the "LED Screen World" reporter the three major backgrounds of my country's LED industry in 2014:

1. Economic background

As the world economy has entered a long-term period of low-speed growth, China's export orientation has become unsustainable, and China's economic growth has slowed down. Under the new normal economy, although economic growth has slowed down, it has become more stable and the actual increase is still considerable. "Looking at the LED industry in 2014, the overall development situation has maintained a good development situation last year, with a growth rate of 20%, which has driven the activity of the industry chain." Guan Baiyu said.

2. Political background

With the convening of the Fourth Plenary Session of the 18th CPC Central Committee, it has been put on the agenda to deepen reforms, actively implement innovation-driven development strategies, and promote strategic adjustment of economic structure. The government is also paying more and more attention to overall and long-term issues of economic development. As a high-tech industry supported by the state, my country's LED industry has developed rapidly in the past ten years. Key technologies have achieved key breakthroughs, product technology levels have rapidly improved, and market applications have continued to expand. It has been recognized by the capital market, and a number of companies have grown into the backbone of the industry. The current industrial development is in the adjustment stage, and companies are seeking a development model that is more suitable for market competition.

3. Multi-technology integration and innovation have brought new changes to the economic development pattern

In recent years, mobile communications and the Internet have developed rapidly, the popularity of mobile smart terminals has accelerated, and the mobile Internet has reached a stage of rapid development, and its role in stimulating the economy has become more obvious. As one of the products of the Internet, e-commerce has greatly promoted social development and economic growth. Guan Baiyu said that the LED industry is in the midst of such a wave of multi-technology integration and innovation. How to adjust the industrial chain and "marriage" the industry with the Internet and e-commerce still requires more attempts and explorations.

The current status and situation of LED industry and applications in 2014

Talking about the current status and situation of the LED industry and applications in 2014, Guan Baiyu said: "In 2014, the production of most enterprises showed a significant growth trend, mainly due to the driving demand of the lighting market. Affected by the market traction, applications consistent with the industry level developed rapidly. In 2014, LED lighting, LED display screens, and LED backlights generally developed well."

1. LED lighting

As we all know, energy conservation and emission reduction have become a world trend, and the concept of green environmental protection has begun to take root in the hearts of the people. In such an environment, LED lighting, one of the LED application fields, has shown explosive growth. In 2014, traditional lighting products such as incandescent lamps began to gradually fade out of the market, and the penetration rate of LED lighting products continued to increase. With the support of the global "white ban", the country's advocacy of green energy-saving lighting and the replacement of private LED lighting, the LED lighting industry has further grown rapidly. "The promotion method of LED lighting has also changed from government promotion only in previous years to a combination of market pull and government promotion," Guan Baiyu revealed to the reporter of "LED Screen World". "Users have not only accepted semiconductor lighting conceptually, but also accepted semiconductor lighting in terms of products. They have been gradually purchased and adopted in the lighting transformation of homes, commercial lighting, industrial and mining enterprises, office environments, etc."

2. LED display screens

After experiencing rapid development in the past few years, my country's LED display industry has become increasingly mature. Due to the outstanding performance of outdoor advertising media, indoor small spacing and other market segments, the LED display market in 2014 still maintained good growth, which can be described as "steady and rising". On the one hand, technological innovations (innovations in multiple video and image format compatibility and control technology, etc.) are carried out in the areas of small spacing, high density, ultra-high definition, and ultra-large screens to further enhance product quality and technical level; on the other hand, these technological innovations have also led to technological innovation in LED chips and packaging and improvements in product technology.

3. LED backlight

LED backlight began to penetrate small-size displays (mainly used in mobile phones) in 2002, and then rapidly developed into the industrialization stage. The demand for TV backlight chips declined in 2014, mainly due to the penetration of direct-type products and the improvement of LED light efficiency. In addition, the demand for power LEDs from direct-lit backlights has further promoted the technological progress of LED chips and packaging.

Integration and mergers in the LED industry in 2014

In 2014, integration, mergers and acquisitions and reorganizations among LED companies became increasingly active. According to incomplete statistics, there were more than 100 mergers and acquisitions related to LED lighting alone. Affected by this wave of mergers and acquisitions, LED chip companies have concentrated to more than 50. In recent years, the homogeneity of LED products has become more and more serious, and some companies have taken the lead in promoting "price wars" in order to seize more market shares, which is tantamount to adding fuel to the fiercely competitive market. As the inevitable result of the LED industry developing to a certain stage, integration and mergers and acquisitions between enterprises have become particularly frequent in recent years. Guan Baiyu predicts that in the next three to five years, the growth momentum of the LED industry will continue and the industry reshuffle will intensify.

Integration and mergers and acquisitions between LED industries are a sign of the continuous development and maturity of the LED industry. Today, with the rapid changes in the industrial structure, the advantages of industry chain integration are becoming more and more obvious. Guan Baiyu believes that industrial integration can effectively optimize the industrial structure and resource allocation, improve production efficiency, and is of great significance in promoting the healthy and sustainable development of the LED industry. For LED companies, integration and mergers and acquisitions are conducive to synergistic and complementary effects, and can achieve the purpose of exchanging channels, extending and integrating the industrial chain, strengthening strength, and expanding scale. At the same time, it also gradually increases LED production capacity utilization and reduces production costs, which helps LED companies maintain an advantageous position in the wave of competition.

LED intelligent lighting under the integration of multiple technologies

In 2014, LED companies paid more attention to the development of new technologies and actively explored various technical routes, market entry points and profit models. Against this background, LED new substrates, device structures, and new packaging technology integration innovations have successively made breakthroughs, providing a solid backing for innovation in lighting, LED displays, and backlights, and injecting continuous vitality into the entire LED industry. Continuous technological innovation brings lower costs and stronger competitiveness.

With the advent of the era of low-price lighting, in order to occupy a place in the fierce competition, LED companies have to launch cheaper solutions to survive, including economies of scale production, fully automated production, etc., to reduce production costs and make LED lighting product prices continue to fall. In addition, LED companies are actively promoting new operating models, such as adopting e-commerce models, which can solve the problem of high prices for LED lighting products.

While many LED lighting companies are stuck in the quagmire of low prices, international lighting giants such as Philips and Samsung have taken a high-end route and launched smart LED lights. Later, domestic Internet companies such as Xiaomi and JD.com also began to get involved in the field of LED smart lighting. LED lighting is no longer limited to providing light, but is developing in a more intelligent direction, and the concept of lighting has also been expanded. According to Guan Baiyu, LED smart lighting involves many aspects such as lighting, control systems, networks, communication protocols, integrated circuits, software, sensors, etc. The integration of multiple technologies brings development opportunities but also challenges. Today, when the homogeneity of LED lighting products is becoming increasingly serious, LED smart lighting has become the focus of the global industry, which not only further promotes the development of the LED industry, but also provides a new development direction for LED lighting.

Joint innovation in my country’s LED industry and applications

The LED industry is a high-tech industry with broad market prospects and both opportunities and challenges. Under the current unfavorable situation in which most LED core technologies and patents are monopolized by Europe, the United States, Japan and South Korea, if my country's LED industry wants to break through and develop in the long term, it must persist in joint innovation. Joint innovation is powerful productivity and creativity, and it is also the two wings that help the LED industry take off.

“Among the two driving forces of technology traction and market driving, the current stage of technology traction highlights the progress of technological innovation and provides strong support for the rapid development of the industry.” Guan Baiyu introduced.

In recent years, my country's LED independent innovation capabilities have been significantly improved. Technical difficulties have been overcome one after another. Breakthroughs have been made in key LED technologies. The luminous efficiency of devices has been continuously improved. The power of blue LEDs has reached 140 lm/w; red LEDs have reached 95 lm; green LEDs have reached 140 lm, which are internationally advanced levels. Silicon substrate LED has reached 140 lm/w and has been mass-produced, leading the world.

In terms of packaging, major breakthroughs have been made in technologies such as flip-chip, COB, integrated packaging and standardized modules. These technologies can meet the needs of rapid development in multiple application fields. Guan Baiyu said that while the luminous efficiency of LED devices continues to improve, companies have begun to pay more attention to the improvement of the comprehensive performance of LED products, including chip yield (between chips, between batches), packaging yield, color temperature, color rendering index, life and reliability, etc. Strengthening innovation in process technology and mass production technology is another focus.

After years of development, my country's LED industry's special equipment, instruments and material supporting capabilities have gradually formed, mainly reflected in three aspects: first, my country's independently innovative metal-organic sources (MO sources) have achieved large-scale application, accounting for more than 60% of the domestic market, ranking among the top three in the world; second, sapphire substrate materials can meet more than 50% of the domestic market, and currently patterned substrates are already being supplied in batches, and the adjustment of product structure has achieved results; third, my country's independently developed phosphors and plastic sealing materials account for 30% of the domestic market share.

In addition, MOCVD, an epitaxial equipment successfully developed by many domestic companies in 2014, has begun process integration with chip manufacturers and has made positive progress. Domestic equipment is expected to be used in chip production lines; at the same time, various LED production-specific equipment and a variety of optical, electrical, color, and thermal performance testing instruments have been used in LED production lines and are operating stably.

In short, with the purpose of meeting market demand and with joint innovation as the cornerstone, my country's LED industry system has basically been formed.

Measures to promote joint innovation of LED and applications

As the global LED market demand further increases, the development of my country's LED industry will face huge opportunities in the future. The LED industry actively promotes joint innovation and has achieved considerable results. So in the face of fierce competition, what measures can be taken to promote joint innovation in LED and applications?

Guan Baiyu introduced that joint innovation not only refers to technological innovation, but also includes mechanism innovation, business model innovation, profit model innovation, etc.

In response to some problems existing in the development of my country's LED industry, the Ministry of Industry and Information Technology, while strengthening the deployment of technological innovation, is also actively exploring and practicing mechanism innovation, which is mainly reflected in the following two aspects:

First, when deploying and arranging technological innovation projects, it is proposed to implement the organizational method of joint innovation of the industry chain, with application-side lighting companies taking the lead, organizing joint innovation of the industry chain, and jointly innovating with LED chips, packaging, testing technology, etc.; LED chip companies will take the lead, organize joint innovation of equipment companies, and accelerate the improvement and application of key equipment.

Second, promote comprehensive standardization of semiconductor lighting and actively explore and practice mechanism innovation.

According to Guan Baiyu, in order to strengthen the standardization work of the semiconductor lighting industry and LED industry, in order to adapt to the needs of the rapid development of the industry, the Ministry of Industry and Information Technology has established a semiconductor lighting standards working group composed of working teams based on the industry chain. It has established a green fast track in the process of standard project establishment, approval, release, and management; it has also explored mechanism innovation in standard formulation and revision management. Formulating new technologies and standards can not only expand the scope of business operations and provide new opportunities for corporate development, but also improve the entry threshold of the entire industry by raising technical standards, thus promoting the good development of the industry.

“A favorable industrial development policy environment, innovation environment and application environment have been formed and are constantly being innovated and improved. my country’s LED industry will surely achieve better development.” Guan Baiyu looks confident in the future of my country’s LED industry.

So as an LED company, how should we promote innovation and seek better development space? Guan Baiyu told reporters that LED companies should actively adjust their industrial structure and product structure, combine their own advantages, find market positioning, strive to innovate, follow a differentiated development path, and strengthen collaboration between technology, products, processes and large-scale production technology to improve product performance-price ratio, ensure quality, and improve core competitiveness.

Summary

With the development of my country's LED industry, it is not only facing problems such as domestic disorderly competition, serious homogenization of products, and weak corporate patent awareness, but also facing the challenges and impacts of international brands. To eliminate accumulated shortcomings and maintain the healthy and sustainable development of the LED industry, joint innovation must be adhered to. Continuously strengthening the ability of independent innovation, increasing the research and development of new products and new processes, and seizing the time to complete the patent layout can not only promote the development of the LED industry and optimize the industrial structure, but also create its own unique competitive advantages in the brutal competition. Only with "gold content" can we go better and further! For LED companies, continuously strengthening their independent innovation capabilities and improving their technological innovation system will help them gain a firm foothold and remain invincible in the fierce industry reshuffle. Only by facing the future with innovation can we create greater success.
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