Why is the price reduction in the middle and lower reaches of the demanding supply chain only "dizzy"?

[Text / high-tech LED Gan Qin] Although the demand for LED lighting continues to rise, but the reduction in profits caused by price cuts has caused many manufacturers to face losses, it is understood that the overall LED unit price decline in 2015 ranged from 30-40%, especially In the second half of the year, there was a dip-like decline, and some product prices even reached the material cost level.

Even if the price has fallen and then fell, the companies in the middle and lower reaches are still very strong in the call for price cuts.

Recently, Gaogong LED visited a packaging company. The general manager of the company said frankly, “A glue company that has long-term cooperation with us can only reduce the price a little bit every time when talking about the price. If they are lowering the price after the lunar year If there is any reservation, we will terminate the cooperation."

In fact, the price of domestic glue is declining every year. According to the research data of GGII, the average price of domestic low-profile silicone in 2015 has dropped from 200-400 yuan/kg in 2014-100- 150 yuan / kg; the average price of high-definition LED silicone is reduced from 1000 yuan / kg to 600-800 yuan / kg.

After years of development, the LED glue industry has also reached a very mature stage. The more this situation, the more difficult it is for enterprises to reduce the price demanded by supply chain customers.

Chen Yongsheng, general manager of Jieguo New Materials, said frankly, "LED glue has no room for price reduction. It can still have a certain decline in the range of 10%-20% a year or two ago, but now the price has already bottomed out. 1%-2% such fine tuning."

In the past 2015, many companies have been able to say that they have experienced the dilemma of “increasing revenues without increasing profits”. In the case of widespread meager profits or even no profit in the industry, everyone hopes that there will be room for price reduction, which also makes them more inclined. This is especially true for the purchase of cheap materials.

According to the data reported by GGII, the average price of red powder in 2015 dropped to 25 yuan / gram, the green powder dropped to 4.5 yuan / gram, and the yellow powder has dropped to 0.5 yuan / gram.

As for whether the phosphor has room for price reduction and how much it can be reduced, Yan Fan, the general manager of Yantai Hilde, said, "The yellow powder has no room for price reduction, and the price reduction of red powder and green powder is only within 10%."

He also pointed out that in addition to the field of backlighting, including companies and the industry is introducing full-color phosphors to replace the original phosphors, there is still considerable profit, in the lighting and other fields, the cost of phosphor materials has bottomed out, In the absence of capacity, you can only face losses.

As for how to meet the price reduction requirements of supply chain enterprises, Dou Fan admits that there is no clear price reduction measures, and can only provide customers with some guiding solutions to help customers reduce the amount of powder used, and help customers reduce costs, instead of the unit price. Go up and make a price adjustment.

In fact, whether it is glue or phosphor, it has already achieved localization. At present, most domestic packaging manufacturers have adopted domestic accessories. "In the case of filament rubber, we have not encountered foreign competitors at present." Chen Yongsheng said .

However, it has been revealed in the industry that there are still some companies in the market that are considering exporting products, taking into account the patent issue, the customer specifies the use of foreign accessories.

In this case, both of the above people believe that such products account for a very small proportion, and in the future, with the gradual lowering of the profit of the packaging factory, the "special" requirements for the designation of foreign accessories will also relax the requirements. Finally, the use of domestic accessories.

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