After the elimination of incandescent light roadmap was announced, LED lighting sector became a hot spot in the market. China Securities Journal reporter conducted an exclusive interview with Chen Yansheng, chairman of the China Lighting Association, on issues that investors are concerned about. Chen Yansheng said that the elimination of incandescent lamps can bring a certain amount of market space to LED lamps, but LED is not the only alternative. The industry is currently in the shuffle stage.
LED is not the only alternative
Reporter: According to the phase-out incandescent lamp roadmap, starting from October 1, 2012, it is prohibited to import and sell incandescent lamps of 100 watts or more for general lighting; on October 1, 2014, it is prohibited to import and sell incandescent lamps of 60 watts or more for general lighting. From October 1, 2015 to September 30, 2016, it is a mid-term evaluation period. It evaluates the early-stage policies and adjusts the follow-up policies. Starting from October 1, 2016, it is prohibited to import and sell incandescent lamps with ordinary lighting of 15 W or more. Or adjust the results of the mid-term assessment. Can the elimination of incandescent lamps free up market space for alternatives?
Chen Yansheng: In large cities like Beijing, the use of incandescent lamps is rare, but the use of incandescent lamps in underdeveloped areas, including rural areas, is still very large. The annual domestic production is about 1 billion. In the future, there will be energy-saving lamps, LEDs, and halogen lamps that replace the incandescent lamp market. Among them, halogen lamps are used less domestically, and most of them should be replaced by energy-saving lamps. The proportion of LED is relatively small, because the development in the field of lighting is not very mature, and the price is relatively high.
Reporter: In the process of replacement, how big is the opportunity for LED lights?
Chen Yansheng: LED is not the only alternative, there are certain opportunities, but the proportion of energy-saving lamps should be greater.
Reporter: Will the pollution problem of energy-saving lamps become a hidden danger in its development?
Chen Yansheng: The pollution of energy-saving lamps mainly refers to the fact that the lamp contains mercury, and there should be no major problems. On the one hand, the amount of mercury injected is getting less and less, and the effect is more obvious; on the other hand, the recovery and treatment measures will be improved in the future.
Reporter: Some experts said that the output of LED light sources in China is 150 million in 2010 and is expected to exceed 1.4 billion in 2015. How do you see the market prospect of LED lights?
Chen Yansheng: The application of LED in lighting has just started and the market has not yet been opened. The future is bright. From the perspective of the entire lighting and lighting industry, it shows a sustained, rapid and steady development trend, which will increase by more than 10% in the next five years. According to the “12th Five-Year Plan†of the industry, in 2015 the sales of the lighting industry was 460 billion yuan, of which exports were 25 billion US dollars. At present, sales of LED lamps range from RMB 20 billion to RMB 30 billion, and the market share will increase in the future.
Policy support methods should be adjusted
Reporter: The policy started early to support the LED lighting industry. Why does it seem that the improvement is not obvious now?
Chen Yansheng: This kind of support is not correct. The problem is not in the enterprise but in the policy. The policy does not support basic research and development. It supports "hype" and even invests in LED. Policies should not interfere with the investment of enterprises, but should allow enterprises to independently determine the direction of investment. It is an abnormal phenomenon that companies invest in government instead of experts.
Reporter: In the LED lighting industry, the situation of business failures has arisen. What difficulties have the industry encountered? What kind of company can win after shuffling?
Chen Yansheng: The LED lighting industry chain includes chips, packaging, and downstream applications. Some time ago, investment in the industry was overheated, and the packaging capacity was relatively high. However, the downstream demand was not so great, which caused some difficulties and caused the company to begin to close down. Relatively speaking, the upstream segment has a higher profit margin, but it must also be a well-run company and must have its own core technology. The ability to win after the shuffle in the future must be an economically strong and technically superior company.
LED is not the only alternative
Reporter: According to the phase-out incandescent lamp roadmap, starting from October 1, 2012, it is prohibited to import and sell incandescent lamps of 100 watts or more for general lighting; on October 1, 2014, it is prohibited to import and sell incandescent lamps of 60 watts or more for general lighting. From October 1, 2015 to September 30, 2016, it is a mid-term evaluation period. It evaluates the early-stage policies and adjusts the follow-up policies. Starting from October 1, 2016, it is prohibited to import and sell incandescent lamps with ordinary lighting of 15 W or more. Or adjust the results of the mid-term assessment. Can the elimination of incandescent lamps free up market space for alternatives?
Chen Yansheng: In large cities like Beijing, the use of incandescent lamps is rare, but the use of incandescent lamps in underdeveloped areas, including rural areas, is still very large. The annual domestic production is about 1 billion. In the future, there will be energy-saving lamps, LEDs, and halogen lamps that replace the incandescent lamp market. Among them, halogen lamps are used less domestically, and most of them should be replaced by energy-saving lamps. The proportion of LED is relatively small, because the development in the field of lighting is not very mature, and the price is relatively high.
Reporter: In the process of replacement, how big is the opportunity for LED lights?
Chen Yansheng: LED is not the only alternative, there are certain opportunities, but the proportion of energy-saving lamps should be greater.
Reporter: Will the pollution problem of energy-saving lamps become a hidden danger in its development?
Chen Yansheng: The pollution of energy-saving lamps mainly refers to the fact that the lamp contains mercury, and there should be no major problems. On the one hand, the amount of mercury injected is getting less and less, and the effect is more obvious; on the other hand, the recovery and treatment measures will be improved in the future.
Reporter: Some experts said that the output of LED light sources in China is 150 million in 2010 and is expected to exceed 1.4 billion in 2015. How do you see the market prospect of LED lights?
Chen Yansheng: The application of LED in lighting has just started and the market has not yet been opened. The future is bright. From the perspective of the entire lighting and lighting industry, it shows a sustained, rapid and steady development trend, which will increase by more than 10% in the next five years. According to the “12th Five-Year Plan†of the industry, in 2015 the sales of the lighting industry was 460 billion yuan, of which exports were 25 billion US dollars. At present, sales of LED lamps range from RMB 20 billion to RMB 30 billion, and the market share will increase in the future.
Policy support methods should be adjusted
Reporter: The policy started early to support the LED lighting industry. Why does it seem that the improvement is not obvious now?
Chen Yansheng: This kind of support is not correct. The problem is not in the enterprise but in the policy. The policy does not support basic research and development. It supports "hype" and even invests in LED. Policies should not interfere with the investment of enterprises, but should allow enterprises to independently determine the direction of investment. It is an abnormal phenomenon that companies invest in government instead of experts.
Reporter: In the LED lighting industry, the situation of business failures has arisen. What difficulties have the industry encountered? What kind of company can win after shuffling?
Chen Yansheng: The LED lighting industry chain includes chips, packaging, and downstream applications. Some time ago, investment in the industry was overheated, and the packaging capacity was relatively high. However, the downstream demand was not so great, which caused some difficulties and caused the company to begin to close down. Relatively speaking, the upstream segment has a higher profit margin, but it must also be a well-run company and must have its own core technology. The ability to win after the shuffle in the future must be an economically strong and technically superior company.
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