Earlier this year, guangdong province pledges inspect bureau announced on 51 batches of LED street lamps and spot check result of light controller, including 20 batches of unqualified, unqualified products found rate was 39.2%. This also means that a large number of unqualified LED products are filled with the market.
Reason two: margin financing difficult
Excess capacity caused by malignant price competition between enterprises, the LED industry downstream enterprise product falling prices, profits can also be diluted. The LED industry profit margins at around 20%, only the net income of less than 5%.
In addition to the profit space is compressed, the financing problem has also been a “mountain” of small and medium-sized enterprise is difficult to climb.
According to industry insiders, the LED industry is generally there is a “serial debt” problem. Many enterprises and suppliers, to rely on credit to ensure that the enterprise capital turnover. According to the general rules of the industry, and many people choose to the upstream raw materials suppliers on credit, while allowing the downstream customer arrears to keep the enterprise long-term orders. Balance in the cycle of chain, once the decline in sales market instability or profit space, product quality can not meet the requirement of the customer, balance the chain will break.
Small and medium-sized enterprise financing difficult is tangible. External costs push money demand, in the case of tightening monetary policy, small and medium-sized enterprises to obtain credit limited resources, financing needs satisfaction is low. Combined with small and medium-sized enterprises lack of collateral, effectively loan difficulty also will increase. Even borrow money, interest on loans to rise and the price is too high, also let small and medium-sized enterprises can’t afford to.
Reason 3: excess capacity evolution
Pushing, now LED market is saturated, the LED industry overcapacity, the vicious competition phenomenon common occurance, good and evil people mixed up various enterprises, everyone in the insist, even at a loss to the production. Is under such conditions, however, LED industry is back in the capital in the eyes of a nation. Xishan coal and electricity, FuRi electronics, byd, etc. Into the LED.