China is researching on LED lighting subsidies and policies at the moment, according to a report from Chinese-language Yancheng Evening News. Manufacturers interviewed indicated Chinese government’s new subsidies were “highly likely” to further promote the generalization of LEDs. Competition among manufacturers have advanced from single product technology to the next level involving systems.
To reach carbon reduction targets, the Chinese government has placed LED subsidies and policies high on its agenda, according to a Xinhua News Agency report. The Chinese government first rolled out its incandescent bulb phase out roadmap in 2011, under the plan ban of 60W incandescent bulb sales will be effective starting from Oct. 1, 2014. Moreover, the country’s Compound Fluorescent Lamp (CFL) subsidies launched since 2008 will end by late 2014. China’s National Development and Reform Commission, Ministry of Finance and other related government agencies are still studying the LED lighting product policies and related subsidies.
“In the residential market, 60W incandescent bulbs were the mainstream product,” said Pan Wenbo, Director Guangzhou Guangya Messe Frankfurt. “Once it (60W incandescent bulbs) exits the market it will open up a huge residential market for LEDs.” Pan also believes Chinese manufacturers needs international perspective, and direct thinking to LED systems.
China’s LED upstream manufacturers complete restructuring
The LED industry has also made many preparations. Since many upstream LED manufacturers have varying product qualities, restructuring in the sector was completed over the last two years. The market is concentrated among manufacturers including U.S. manufacturer Bridgelux, China’s San’an Opto and other manufactures.
Bridgelux will continue to expand investments in China this year, said Bridgelux Chief Executive Officer Tim Lester. After the company establishes a new R&D center in Southern China’s Xiamen, it will continue to strategically work with leading Chinese package manufacturer Refond Optoelectronics. Chinese manufacturer Changfang Lighting and other chip manufacturers are also quickly acquiring companies to prevent from being left behind.
LED downstream restructure enters crucial time point
In contrast, the LED downstream is still restructuring, and is currently at a critical moment. Compared to lighting shows in the past, “sustainable lighting solutions” and “LED technology integration” were the new highlights at this year’s Guangzhou International Lighting Exhibition, observed Hu Zhongshun, General manager of Guangzhou Guangya Messe Frankfurt. Philips, for instance, was promoting “smart solutions” for residential and commercial lighting. “Future lighting systems will be integrated with mobile devices and apps,” said Philips CEO Eric Rondolat.
Chinese manufactures have also caught up. Chinese LED lighting manufacture Geoshan has developed comprehensive LED lighting solutions. “Companies solely focused on packaging and manufacturing have already lost their advantages,” said Lin Chenchuang, Chairman and General Manager of Geoshan. ”Companies now must be able to comprehensively cover the LED lighting supply chain and work from LED lighting design, product appearance, application, construction implementation and design planning. Companies need to provide comprehensive solutions to win in market competitions.”
Industry insiders noted, the LED industry needs government promotion, but also requires manufacturers to improve their own market competitiveness. According to Guangdong Guangya Academy of Lighting Research compiled statistics, China’s LED application market exceeded RMB 200 billion (US $32.11 billion) in 2013, and is expected to grow at a rate of 40 percent this year.