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Industry Dynamics

The price was forced, but no delay, the cost of rising prices forced enterprises to join the price camp

source: LED time: Dec 01,2016 Passengers:

Since the beginning of this year, the entire LED industry in the downstream was shrouded in a "price" sound, each enterprise in their own way to carry out the material costs of self digestion, the price is the last resort.

One of the domestic LED packaging giant star optoelectronics, also issued a document yesterday, said, we are forced to price, but no delay." And claimed that this price increase is an inevitable choice.

In September 1st of this year, the state has made this year, the first star photoelectric price decision: the company's display device product price increases across the board 10%.

According to the engineering LED, LED industry chain can increase product prices to choose, including upstream chip, bracket, lamp, chip, packaging materials, aluminum plate and other raw materials, although the middle reaches of the packaging industry, demand for raw materials is limited in size, but the influence can not be underestimated.

According to the China Star electric relevant responsible person said, "while we and the suppliers have established a strategic partnership, but the price of raw materials has reached the highest level, and the company independent research and development, equipment maintenance, artificial manufacturing costs are rising."

In order to ensure the quality of products, the National Star photoelectric decision: since December 1st, the National Star White LED full range of product prices increased by 5-20%.

Yesterday, the high LED starting a new round of the packaging enterprises (Newell, Hongli smalite, crystal electronics, Siu Chi lighting etc.) the price adjustment letter, Hongli Newell said, to increase product prices ranging from 5%-15%.

Hongli Newell deputy general manager Wang Gaoyang said the event prices, "for the healthy development of enterprises, a reasonable profit is the essential condition for the price, we mainly to maintain, through two paths: first, through internal digestion, improve technological level and efficiency, to enhance the output ratio, the premise that the use of the same the proportion of materials, more in line with the industry standard second, external power output."

How to ensure sustainable enterprise orders the next step, Wang Gaoyang also gives his own interpretation of "relying mainly on three parts, and ensure product quality; control of the quality of the material, two links; three, the corresponding downstream lighting enterprise customers the pursuit of quality."

In mid November this year, the high technology industry research institute held the 2017 industry opportunities and "new" high school ten anniversary celebration of Thanksgiving, REFOND CTO Pei Xiaoming talked about the "price" phenomenon in the roundtable dialogue session, the package from the upstream point of view, is the main chip, stent related products in the price, for our LED packaging enterprises and don't want to go down in price, and the price may bring some revenue, only to digest through internal cost control.

But the price is the last resort for many enterprises can under.

Liyang shares relevant responsible person said, "recently, we learned that the packaging enterprises after the price adjustment, agree. Now this time node, we are under immense pressure, companies in order to ensure the customer's vested interest decide not to price adjustment, but has now reached a critical point, if raw material prices continued next month we will have the relevant price move."

So, what is the driving factor behind this price rise? We can not help but throw this way to make a lot of work in the LED industry for decades of veterans do not understand the problem, to be answered by the LED.

Insiders admitted that, in fact, far more than the price exists in the LED industry, other commodities are rising across the board, just on the packaging material, the price increase of 50%.

According to informed sources, the upstream chip prices are likely to have a new round of price increases.

Whether it is out of the U.S. dollar exchange rate, or out of the country's macroeconomic regulation and control, it can be said that the price of raw materials based on the bulk of the upgrade is the most fundamental fuse.

In short, the increase trend is inevitable, but the price adjustment should be put down in the background analysis of supply side reforms, from the sustainable development of the whole LED industry, a rising which covers the upstream raw materials supply chain development, midstream packaging company independent research and technology and process improved etc..