China's LED industry both advantages and risks

New energy sources will gradually replace traditional energy sources to promote social and economic progress as a driver, and new energy, they are accompanied by the birth of new technologies came into being and progress of, LED industry is a typical new energy incubator. The industry believes that the LED industry in China both advantages and risks, banks should support the development of China's LED industry. Obvious advantages of LED industry

LED is LightEmittingDiode (light-emitting diodes) the short title, is a compound semiconductor components, electrical energy can be converted into light. LED with high luminous efficiency, environmental protection, long life, small size, etc.. Products are mainly used in mobile phones and other devices backlight, traffic lights, outdoor landscape lighting, interior lighting, automotive lighting inside the vehicle, miner's lamp in areas such as security lighting, etc., of which the largest use of mobile phones, accounting for LED application market of 36%, followed by is the signal instructions, such as traffic lights, accounted for 17%.

LED low learning threshold. Although the LED is relatively weak industrial base, relatively low technological level, but some overseas enterprises to employ technical staff, continue to make breakthroughs in technology, many enterprises have already made their own intellectual property rights, domestic high-quality technical level of enterprises and companies of Taiwan or less the same skill level, with international companies as a whole has been to narrow the gap.

LED's investment is relatively small. LED billion initial investment can be set up factories, the Innolux,士兰微industry, such as the total assets of well-known listed companies will be more than 10 billion yuan, the lower the threshold for domestic firms to enter, easy to implement a rolling development and integration Semiconductor Manufacturing and LCD panel manufacturers easily to tens of billions of billions of yuan in investment it is "insignificant" easier access to the domestic enterprises to form industry clusters.

Obvious advantages in resources. China has abundant resources of non-ferrous metals, gallium, indium-rich reserves, the world's reserves of 70-80%, which makes the development of LED industry in China has the advantage of resources. After the maturity of the technology, LED downstream packaging and device production is labor-intensive, China has a clear advantage in labor costs.

LED industry at risk

Technical risk. LED is high-tech industries, production technology and continuous improvement of product performance, the sustainability of the industry enterprises with the industry to bear in LED technology, the company is essential. Once the technology is backward, it will lose market share or even a loss, will eventually produce a vicious circle.

Risk transfer industry. About 80% of Taiwan's LED packaging capacity has been transferred to the mainland, in the upper reaches of the chip, the transfer of epitaxial film industry is relatively small, but there is a growing trend. LED structure to increase the mainland is inevitable to encounter competition in Taiwan-funded enterprises, the two competing against each other, the present situation, mainland enterprises is still a disadvantage.

Macroeconomic risks. Global economic recession is likely to influence national policies on support for the LED industry, LED products in the Western countries, as well as the speed of China's popularity may also be lower than expected.

Banks should support the development of LED industry

Key support for projects already in operation. LED industry in particular, the upstream area are technology-intensive industries, R &; D and industrialization of the risk of a larger enterprise involved in the industry to have experienced industry experts and technical team, the banks involved in funding if premature, may face a greater risk , in the light of this, in the LED industry in China is not yet mature enough period of time, banks and even the desirability of production in the project intervention is put into production again.

Focus on support for government support of major projects. LED application products with the characteristics of energy saving and environmental protection. In the "green revolution" theme, part of the context of local government jurisdiction, and operation of a good LED enterprises such as government subsidies, financial discounts, and other land-use policies, as well as the local government under the direct orders to enterprises. Such as the Ministry of Science and Technology and the Ministry of Finance in 2008 launched the "City 10000 10" Semiconductor lighting demonstration project is planned by 2010 in 10-20 cities municipal LED lighting, Weifang, Dalian, Shenzhen and other cities have been 21 out for the pilot cities, It is understood that in some cities has been with the company entered into a joint venture agreement or under the order. Suggested that all banks should focus on the Government to support these practical support to enterprises and projects.

Syndicated loans should adopt the form. As an emerging LED industry, the relative lack of banking industry knowledge, a serious asymmetry of information between Bank of corporate investment and financing difficult to fully grasp planning. The syndicated bank loan is spread risks, to improve the status of banks and enterprises an effective way of negotiations, the banks can invest part of understanding and influence the development path and the overall investment process, to avoid over-investment and financing business. National Development Bank in 2008 in Dalian branch line as the lead bank in Dalian and Harbin branch of syndicated loans, through to the Dalian Road chip Technology Co., Ltd. issued U.S. 3 billion loan (State Bank to open 200 million, Kazakhstan 100 million lines), for the company's six billion high-brightness light-emitting semiconductor chip (LED) construction projects.

Guide enterprises to make use of bond financing. LED industry in China's large-scale production is still in the initial stage, only a single individual banks and the indirect financing channels for enterprises generally find it difficult to meet demand, not easy to revive the entire industry, short-term financing bill, medium-term instruments such as direct financing tools are scattered bank risk, lower cost of corporate finance, capital markets to expand business in an effective way to fame, for smaller enterprises, but also the way to raise funds through the collection, suggested that all banks in the process of enterprise marketing can be an appropriate use of bond financing guide enterprises.