Recently, Shenzhen, a medium-sized LED business owner "running the road" message, once again caused the industry's LED business status quo concern. At present, the LED industry to enter the threshold is too low, a lot of enterprises, resulting in low-end industrial chain overcapacity, market competition is very fierce.

    Insiders pointed out that the current LED is a typical labor-intensive manufacturing industry, the gross margin of only about 20%, while the net profit of less than 5%, many do not know the technology companies rely on the assembly of LED components can also occupy a place in the market. "At present, more and more weightless quality LED products, about 90% of enterprises are playing price war." LED industry veteran Lin Sheng said. Vicious price war LED industry downstream business product prices continue to decline, profits are diluted.

    In addition to the difficulties in the sales market, industry sources, the prevalence of LED industry, "borrower" issue. Many companies work with suppliers and rely on credit to secure the arrival of corporate funds.

    According to industry rules, many choose to credit upstream suppliers of raw materials, while allowing downstream customers to arrears in order to maintain long-term business orders. In this cycle arrears of the chain, once the enterprise's sales market is unstable or profit margins decline, product quality can not meet customer requirements, the arrears chain will be broken.

    Zhang Xiaofei, director of the Institute of LED industry, pointed out that at present the industry overcapacity also to some extent accelerated the spread of "corporate bonds" between enterprises. On the one hand, the overcapacity of upstream has relaxed the credit period of enterprises and potentially contributed to the speculation of enterprises. On the other hand, the excessive spread between upstream and downstream capacity and the lowering of the average interest rate of the industry are also the origins of the development of the government bonds.