As the fourth generation product in the lighting industry, LED is one of the high-tech fields with development prospects in the 21st century. In the future, LED lights will gradually replace incandescent lamps and fluorescent lamps. The performance comparison of different generations of lighting products is shown in Table 1. Specifically, under current technological conditions, LED has shown numerous advantages: ① high light efficiency. The spectrum is almost entirely focused on the visible light frequency, and the efficiency can reach over 50%, while the visible light efficiency of incandescent lamps with similar light efficiency is only 10%~20% High light quality. Due to the absence of ultraviolet and infrared rays in the spectrum, there is no heat or radiation, making it a typical green lighting source Low energy consumption. The individual power is generally between 0.05-1 W, which can meet different needs through clustering, with little waste. Using LED as the light source, the power consumption is only 1/8-10/10 of that of ordinary incandescent lamps at the same brightness. ④ Long lifespan. The standard lifespan for light flux attenuation to 70% is 100000 hours, and an LED light can be used for 50 years under normal conditions; I only use two lamps in my lifetime Reliable and durable. There are no easily damaged components such as tungsten wires and glass shells, and the abnormal scrap rate is very low, with extremely low maintenance costs Flexible application and small size. It can be flat packaged and easily developed into lightweight and short products, which can be made into various forms of specific application products such as dots, lines, and surfaces Safe, the unit working voltage is approximately between 1.5 and 5 V. ⑧ Green and environmentally friendly. Waste is recyclable, pollution-free, and does not contain mercury like fluorescent lamps Short response time. Suitable for frequent switching and high-frequency operation situations.
Given the inherent advantages of LED, it is currently mainly applied in the following areas.
1) Display screen, traffic signal display light source. LED lights have the characteristics of vibration resistance, impact resistance, fast light response speed, power saving, and long service life. They are widely used in various indoor and outdoor display screens, divided into full-color, tricolor, and monochrome display screens. There are more than 100 units in development and production nationwide. Traffic signal lights mainly use ultra high brightness red, green, and yellow LEDs. Because using LED signal lights is energy-saving, reliable, and high, traffic signal lights are gradually being updated and replaced nationwide, and the promotion speed is fast, with a large market demand.
2) Applications in the automotive industry. Automotive lights include the dashboard, audio indicator lights, switch backlight, reading lights, and external brake lights, tail lights, side lights, and headlights inside the car. Automotive incandescent lamps are not resistant to vibration and impact, are prone to damage, have a short lifespan, and require frequent replacement.

 3) LED backlight. The high-efficiency side emitting backlight source is eye-catching. As an LCD backlight application, LED has the characteristics of long lifespan, high luminous efficiency, no interference, and high cost-effectiveness. It has been widely used in electronic watches, mobile phones, BP machines, electronic calculators, and card readers. With the increasing miniaturization of portable electronic products, LED backlight sources have more advantages. Therefore, the backlight production technology will develop towards thinner, lower power consumption, and uniform consistency.
4) LED lighting source. The current direct goal is to replace incandescent and fluorescent lamps with LED light sources, and this trend of substitution has begun to develop in local application areas.
5) Other applications. For example, a popular flash shoe for children, with built-in LEDs flashing and emitting light while walking, requires 500 million light-emitting diodes per year in the Wenzhou area alone.
Supply and demand analysis of China's LED market
Overview of China's LED Industry Chain
The LED industry chain is divided into upstream, midstream, and downstream. The upstream refers to the production of epitaxial wafers, the midstream refers to chip production, and the downstream refers to the packaging industry. The technology content and investment in the production of upstream epitaxial wafers are extremely high, followed by midstream chips. It is easy to enter the low-end of the downstream packaging industry. But in fact, currently packaging has put forward higher requirements for the heat dissipation and luminescence of high brightness chips, and the technical requirements and importance are also increasing. The industry presents a pyramid shaped pattern with relatively few upstream and midstream enterprises and numerous downstream enterprises. Overall, the global LED core device industry is developing rapidly, with significant progress in semiconductor material production technologies such as epitaxial wafers, chips, display screens, and related silicon crystals. High brightness screens, GAN chips, multi chip technology, and various color light technologies are representative achievements of the growth of the LED core device industry in recent years.

 After years of development, the LED industry chain in China has become increasingly perfect, with enterprises covering various industrial links such as substrate, epitaxial, chip, packaging, and application. Looking at the overall industrial chain, due to the high demand for technology and funding from upstream industries, domestic enterprises rarely enter, resulting in a small number and scale of enterprises in the industry. In contrast, due to the relatively low financial and technological requirements for downstream packaging and application, which is in line with the characteristics of domestic enterprises with limited funds and weak technology, there are more enterprises engaged in these two aspects in China. The uneven distribution of this corporate structure has led to China's LED industry mainly focusing on low-end products, and enterprises are facing severe price pressure for a long time. With the launch of the national semiconductor lighting project, the development of China's LED industry is changing, and the upstream industry of China's LED has experienced rapid development, with the development of the chip industry being particularly noteworthy. However, from the perspective of industrial scale alone, packaging remains a significant link in the Chinese LED industry chain. In 2009, the total output value of China's LED industry, which includes four links: substrate, epitaxial, chip, and packaging, reached 10.55 billion yuan, of which the output value of the packaging link reached 8.75 billion yuan.
2. Distribution of demand in the Chinese LED market
1) LED backlight display. With the continuous expansion of demand for large-sized LCD display backlight applications such as televisions and laptops, as well as for automotive and indoor lighting applications, the global LED display market is also expanding. In terms of growth rate, it was 2.1% in 2005 and 8.7% in 2006, with an average growth rate of 14.6% between 2006 and 2010; It is expected that by 2011, the market size of LED display screens will reach 12.3 billion US dollars, more than twice that of 2006.
2) LED lighting. With the successful hosting of the 2008 Beijing Olympics and the 2010 Shanghai World Expo, the high-tech application of LED lighting has been elevated to a new level. The complex and ever-changing applications have added a lot of color to the entire world. In 2013, LED lighting and display components will account for 30% of the entire LED market and will face huge development opportunities.

  3) Expand bulk demand for infrastructure construction. Faced with the financial crisis, under the macroeconomic regulation policy of "expanding domestic demand and promoting growth", China will accelerate the construction of affordable housing projects, rural infrastructure construction, major infrastructure construction such as railways, highways, and airports, and post disaster reconstruction in earthquake stricken areas in the future. The investment scale will be significantly increased. According to the information released at the press conference held at the second session of the 11th National People's Congress, 370 billion yuan will be invested in rural livelihood projects mainly focused on water, electricity, roads, gas, and housing; Infrastructure construction, mainly consisting of railways, highways, airports, and water conservancy, will invest around 150 billion yuan; Energy conservation, emission reduction, and ecological engineering will invest 210 billion yuan; Adjusting the structure and technological transformation will invest around 370 billion yuan; The post disaster recovery and reconstruction investment in the disaster area is 1 trillion yuan. These massive investment and construction measures will inevitably increase the bulk demand for various LED application products, including display screens, special lighting, general lighting, and landscape lighting.
The competitive landscape of China's LED market
1. Overall competitive landscape
In terms of production capacity concentration, due to the limited number of large domestic enterprises and the dominance of small and medium-sized enterprises, the production concentration of the top ten companies in the field of epitaxial wafers is 75.4%, while in the chip field it is much lower at only 56.4%, and in the display screen field it is lower at 45.6%. It can be seen that the higher the concentration of front-end domestic enterprises, the lower the production concentration of downstream products with many enterprises. Overall, the industrial concentration of China's LED industry is relatively low, and although the concentration in the upstream is normal, it is also facing a decline with the entry of many enterprises.
In terms of brand concentration, due to the limited number of well-known domestic brand enterprises, small brand enterprises occupy the main position, resulting in a concentration of 72.4% in the top ten brands in the field of epitaxial wafers, a much lower concentration in the chip field, only 52.3%, and a lower concentration of 40.6% in the display screen field. It can be seen that similar to the concentration of production capacity, the higher the concentration of domestic brands in the front-end, the lower the concentration of brands in downstream products due to the large number of enterprises. Overall, the brand concentration of China's LED industry is not high, and the overall competitiveness of the industry is low. There is still a long time to go on the path of branding.
In terms of technological competition, several companies monopolize the field of epitaxial wafers, making it difficult for foreign entrants to enter quickly; In the field of chip manufacturing, there are relatively low technological barriers and multiple technologies coexist; In the field of display screen manufacturing, due to the diversity of product applications and technology, the barriers are relatively low. Overall, in terms of technological competition, the field of external extension chips and chips is relatively clear, while the field of display screens has numerous technologies and diverse products.

  2. The competitive landscape of enterprises within the industry
In terms of enterprise competition within the LED industry, the main domestic LED epitaxial and chip companies include Xiamen San'an, Dalian Lumei, Hangzhou Shilan Mingxin, Shanghai Blue Light, Shenzhen Fangda, Shanghai Lanbao, Shandong Huaguang, Jiangxi Lianchuang, Shenzhen Century Crystal Source, Guangzhou Puguang, and Yangzhou Huaxia Integrated.
In the development process of the LED chip industry, early products were mainly ordinary brightness chips, and there were only a few manufacturers such as Nanchang Xinlei. Since 2003, chip production enterprises represented by Xiamen San'an and Dalian Lumei have focused their products on high brightness chips in response to the demand of the chip market, directly driving the rapid growth of high brightness chip production. For a while, there has been a wave of development in the LED chip industry in China, with high brightness chips becoming the main driving force for the development of the LED chip industry. In 2009, the production of LED chips in China reached 30.93 billion units, with an output value of 1.19 billion yuan.
With the continuous increase of LED chip production enterprises, the growth rate of LED chip output value has always been higher than that of the packaging process, leading to a continuous increase in the proportion of chip output value in China's LED industry output value, from 5.4% in 2002 to 11.3% in 2009. It can be seen that China's LED industry is moving from low-end to high-end, towards chip links with higher added value and core value.
The competitive landscape of enterprises in the field of packaging is characterized by a large number of enterprises without large leading enterprises; In other fields such as display screen manufacturing, there is also a trend of fierce competition, with more enterprises but fewer large-scale enterprises.
The Growth Trends and Prospects of China's LED Market
At present, the application market in our country is mainly in building lighting and indoor and outdoor display screens, so the next wave of main players may still be in these markets. But the penetration in mobile phones, small-sized LCD backlights, and cars will increase, and the development of some scattered markets such as special lighting will also be greater (special lighting has less stringent cost requirements than general lighting). After several years of replacement, LED traffic indicator lights have become very common. Due to the long service life of LEDs, it is difficult to have large-scale replacement work in the short term, which will lead to a period of low demand for LED traffic indicator lights; The domestic sedan market is huge, but with high requirements and long certification cycles. As long as there is excellent product quality, the demand for LED backlights and headlights in the domestic car market is very high, and the demand growth in this market is relatively stable; LED display screens, with their advantages of easy assembly, low power consumption, and high brightness, have been widely used in banks, securities, squares, stations, and sports venues. There is still great potential for growth in this market in the future; Driven by the demonstration effects of the Olympic Games, World Expo, and some urban night scene projects, as well as many favorable factors such as the national semiconductor lighting project, the architectural lighting market still has a broad prospect.

   According to professional research institution N e x t G e n Research, it is estimated that China's LED output value will exceed 150 billion yuan in 2011. Based on the following points, it can be considered that China's LED industry has a good development prospect in China: ① In terms of technology, LED has high technological growth bottlenecks and low barriers, and the long-term accumulated research resources in the semiconductor field in China can be used, with a good research foundation. Although the foundation of integrated circuit manufacturing in China is relatively weak and the level of technology is relatively low, some domestic enterprises have continuously made breakthroughs in technology by hiring overseas technical personnel to join, and the overall gap with international large factories is also constantly narrowing The investment in LED is relatively small, with an initial investment of 100 million yuan to build a factory. Domestic enterprises have a low entry threshold and are easy to achieve rolling development, which is "insignificant" compared to the investment of billions to tens of billions of yuan in integrated circuit manufacturing and LCD panel manufacturing. Domestic enterprises can easily enter and form industrial clusters, but of course, it may also cause vicious competition and require market integration to develop to a certain stage The domestic market is huge, and the main market for LED in the future is the general lighting market. The market capacity is large, and the terminal consumer market is relatively scattered, making it difficult to form monopolies. Domestic enterprises have broad living space Some domestic enterprises have core intellectual property rights, such as the silicon substrate gallium nitride blue light project of Jingneng Optoelectronics and the core technology in the chip field of Dalian Lumei, all of which have global competitiveness. These enterprises are prone to forming demonstration effects in technological development, promoting the healthy growth of the domestic enterprise market After the technology matures, downstream packaging and device production of LED belong to labor-intensive, and China has the advantage of developing labor costs.
Conclusion
In the long run, in the coming years, with the prevalence of global energy conservation and emission reduction, environmental protection and energy conservation have become market hotspots, and the LED industry has also begun to heat up. After more than 30 years of development, China's LED industry has achieved independent production of devices, chips, and epitaxial wafers. However, the output of domestically produced LED chips and epitaxial wafers is still limited, and their products are mainly in the middle and low grades. The industrialization scale is relatively small, and can only meet 20% to 30% of the demand of domestic packaging enterprises. Most high-performance LED and power LED products rely on imports. With the vigorous promotion of the government and the cascade transfer of global industries, it is estimated that by 2011, the output value of the entire LED industry in Chinese Mainland will exceed 150 billion yuan. In the LED industry chain, LED epitaxial wafers and LED chips account for approximately 70% of the industry's profits, and LED applications account for approximately 10% to 20%. In 2015, the industry scale reached over 500 billion yuan. The number of enterprises entering the LED industry in our country is increasing day by day, and the competition in the industry market will become more intense.