LED patent barriers are expected to break down the price of LED products

Within two to three years, a group of key white LED field core patents will continue to spend 20 years of patent protection period, and both Quanzhou and capital market investors are eager for the LED industry. With the gradual launch of more extensive downstream applications, the LED market will usher in explosive growth in the future.

Barriers to break down prices Epitaxial wafers and chip makers that have pulled prices upstream earned 70% of profits in the entire industry chain, while LED packages in the middle reaches earned profits of about 20%, and they are at the lowest end of the industrial chain. Businesses have only 10% of profits. "The lack of innovation and research and development is only to give people the right to process, and the added value of the products is very low," said Huang Shuiqiao, director of the Quanzhou LED Industry Technology Innovation Strategic Alliance.

At present, there are two or three hundred LED companies in Quanzhou, achieving output value of more than 5 billion yuan and lacking well-known brands. The main reason why LED prices were expensive in the past was that most of the manufacturing patents were controlled by Japanese manufacturers, and they were unwilling to authorize them. As a result, only a handful of suppliers of LEDs were available. However, the expiration date of these patents is within two or three years. If they fail, it is believed that a large number of LED manufacturers will soon emerge in the country and quickly lower the selling price.

Huang Shuiqiao believes that this is exactly the time when some of the more powerful Quanzhou enterprises are involved in the upper reaches of the industrial chain to carry out core technology investment and R&D.

Upstream and downstream of the industrial chain Yang Qingshan, chairman of Sumit Electronic (Xiamen) Co., Ltd., believes that Quanzhou enterprises that have long been engaged in the production and sales of downstream products will have more advantages in investing in upstream technology research and development. The company grasps the details of the sales of terminal products and conducts core product R&D according to the needs of customers, eliminating the risk of “crossing the river by feeling stones”.

For most companies, it is not realistic to invest heavily in R&D of core technologies. “Upstream and downstream cooperation is also a choice that will bring business opportunities when core technologies expire.” Yang Qingshan said that all aspects of the LED industry chain are There are Quanzhou companies, but because of the factors involved in the import of raw materials, technology patents and other factors, Quanzhou enterprises that are truly large-scale and large-scale investment in this industry are still a minority. Xiamen enterprises also have their own "difficulties": Although LED technology development in the upstream of the industrial chain, Xiamen LED leading enterprises in the domestic industry to occupy a leading position, but the production of downstream applications, packaging, production capacity is weak. This “backward triangle” industry status has caused the disconnection of upstream technology and application, leading to high prices of related products.

Yang Qingshan said that this brings cooperation space, LED companies carry out the industrial chain division, industry leading companies conduct upstream technology research and development, and small and medium-sized enterprises can expand themselves through application and packaging work.