LED industry: M&A acceleration, rehearsing China's "war in late Qing Dynasty warlords"

[ High-tech LED News ] On January 25 this year, Zhen Mingli acquired HCI Company for US$17 million and took the lead in launching the overseas LED lighting market. Then, the big family announced that they would invest in the capital of Shenzhen LED big screen leader Yuanheng Optoelectronics, holding 51% of Yuanheng Optoelectronics with 41.8 million yuan, deeply involved in LED application.

According to the statistics of the High-tech LED Industry Research Institute, the total value of China's LED industry in 2010 reached 126 billion yuan, a year-on-year increase of 50%, while the number of middle and lower reaches of LEDs increased to about 5,000. Such a strong development situation makes small and small troubles War has been unable to meet the needs of competition, and resource integration has become an inevitable trend. "The competition of the LED industry in the future must be the competition of the commercial capital model," said Shi Zhongyao, chairman of Ruituo, to the Gaogong LED reporter.

At present, there are three kinds of powers in the domestic LED market: state-owned enterprises, foreign-invested enterprises and private enterprises. The self-advantages and offensive momentum of state-owned enterprises and foreign-invested enterprises make private LED enterprises ready to go, and go hand in hand. Different companies have set off a wave of mergers and acquisitions in their respective fields. Enterprises of different natures have cooperation and competition, and preview the situation of China's "warlord warlords at the end of the Qing Dynasty." In the future, the LED market will also usher in a three-pronged integrated market.

State-owned enterprises join hands to complete the transformation
LED industry is the road of future development. Several domestic leading electric appliances also want to acquire enterprises with core technologies, or join hands with private enterprises, or directly control through financing, to achieve the horizontal leap of giants and complete the road of transformation.

As early as 2007, the Rainbow Group under the SASAC targeted the LED industry, first investing 130 million shares in Shanghai Blu-ray 51%. This holding is an important strategic step for Rainbow Group to enter the field of optoelectronics and implement industrial transformation and enter the LED industry.

In January of this year, Rainbow invested 10 billion yuan to develop LED chip projects with Shanghai Blu-ray. "200 MOCVD is carried out in three phases and is still in the installation. Zhou Kaixuan, deputy director of Rainbow Group's Rainbow Optoelectronics Device Factory, said in an interview with Gaogong LED reporter, "Rainbow invests heavily in the LED field. We have the upper middle The entire downstream production line. ”

With the advantages of strong capital and channels, state-owned enterprise units, when the development of the LED industry is in a hot spot, finance holding, take the initiative, and complete the vertical integration of the industry. "The LED lighting industry is very competitive. However, we have not felt that the background of central enterprises provides us with a variety of conveniences. We have a technical research cooperation with Peking University and set up a technical research center. In addition, Rainbow's industrial chain layout has many advantages." Zhou Kaixuan talked confidently.

"Investing in the LED industry is based on the development of LED lighting. We have completed the transformation of the company by arranging the entire industrial chain." Ke Hanhua, Assistant Director of Investment Development Center of Konka Group Co., Ltd. told the reporter. In November last year, Konka invested US$22.5 million in equivalent RMB shares in Yingrui Optoelectronics Technology (Shanghai) Co., Ltd., focusing on LED epitaxial wafers and chip projects. Subsequently, Konka invested in 80 million Ruifeng, laying out the LED industry chain. "At present, the cooperation between Konka and Taiwan billion is based on this."

When several major electrical giants in China besieged LED lighting, the state-owned Great Wall Technology also announced that its subsidiary Great Wall Development signed a contract with Epistar, Yiguanjing and Country Lightin for the joint venture to develop Jingguang (Xiamen) Co., Ltd. It invested US$52.8 million and held 44% of the joint venture company. This move enables Great Wall Technology to directly cut into the upstream field of LED, cooperate with international giants, and make full use of its patents and technologies.

The M&A strategy of state-owned enterprises will exert pressure on the LED industry that is full of glamour, especially for some private enterprises that are engaged in price wars and talent wars. To make their own brands “fly into the homes of ordinary people”, it is necessary to overcome difficulties. . The logos such as “Rainbow” and “Great Wall” have been deeply rooted in the hearts of the people. In addition to solving technical problems, private enterprises must also eliminate the traditional concept of “preconceived” in the minds of consumers.

Foreign companies are forced to enter, and they are fierce. <br> When state-owned enterprises are closely involved and plan to finance mergers and acquisitions, overseas leading enterprises have not only completed the transformation path through mergers and acquisitions, but also mastered the core technology of the industry, and have already started the horn of entering the domestic market. .

The LED transformation of foreign companies is not only earlier than domestic, but also the way of vertical integration is different from domestic enterprises. Philips, the world's leading lighting company, extends its reach to each country. The “M&A strategy” is not only one of its winning weapons, but its M&A route is also ahead of the industry.

Earlier, Philips acquired the entire process of LED chips, package-to-module, luminaire systems, and its control and design by acquiring ColorKinetics, Lumileds, Canada's TIRSystems, and Italian LED design company IltiLuce.

Philips is very concerned about the Chinese market. For the cooperation plan with Chinese companies, Lin Liangqi, CEO of Philips Lighting Greater China, said that if there are outstanding companies, the possibility of acquisition is not ruled out.

In fact, the focus of Philips Lighting's M&A in the Chinese market has already begun. In December last year, Philips announced that Philips, the Netherlands, acquired Jiali Shi (Group) Co., Ltd., headquartered in Hong Kong, China, and integrated it into Philips Professional Lighting. Part of the entertainment lighting business. At this point, Philips has a complete industrial chain that has penetrated into different consumer sites.

"Philips has a very long-term plan. The future lighting is intelligent lighting, technology and art are in the same place, and Philips has already entered the lighting design company." Gao Gong LED Zhang Xiaofei said that not only LED lighting manufacturing among Philips lighting integrated companies Manufacturers, but also a group of cutting-edge lighting design companies.

"At present, a key issue facing the Chinese LED market, especially for large enterprises, is patent barriers. Cooperation with the five international giants can effectively use patent convenience and gain technical advantages." Zhou Kaixuan, deputy general manager of Rainbow Group Beijing Plant Speaking, "At present, Rainbow is also negotiating with Toyota, Cree, and hopes to achieve strategic cooperation."

Foreign companies not only acquire each other, but also try to dominate the Chinese market through mergers and acquisitions of Chinese companies. Chinese companies lack core technology, lack of core equipment, and lack of research talents. While doing ODM and OEM production and agency, they help foreign companies earn in the Chinese market. How much is it to take most of the profits?

Private mergers and acquisitions, the future is awesome <br> At present, the pattern of China's LED industry is similar to that of the warlords in the early Qing Dynasty and the early Ming Dynasty. State-owned enterprises like warlords have a state-owned background; foreign companies like imperialism have direct control over the domestic LED market, and similar to the revolutionary army. The private enterprises of the workers, peasants and the army rely on the strength of the masses to gradually develop and grow. The difference is that the situation of foreign companies' control over China is severe. "There must be an internal security before the outside world." State-owned enterprises and enterprises will go hand in hand to jointly develop the domestic LED industry.

In the case of core technology and huge profits being manipulated by foreign companies, the development of China's LED enterprises is rampant, and the current situation of small-scale and indistributed industries has limited the development of enterprises, making China's LED companies have no leader. Fortunately, the dawn of the LED lighting era has also prompted companies to join the bridge to catch a car, the enclosure is also good, the money is worthwhile, the Chinese LED enterprises are also "fertilizers and waters are not outside the field", a strong domestic development force.

"Enterprise mergers and acquisitions can make full use of their respective resource advantages and join forces. Dehao Runda has a gradual industrial chain integration company, combined with the channel advantages of other companies and customer group resources. If combined, the business operation benefits will be magnified. This kind of power is a giant," Liu Xudong, general manager of Dehao Runda LED Lighting Division, said in an interview with Gaogong LED reporter that as a "m&A model" of China's LED market, Dehao Runda completed the work on Guangdong Jian Long and Enping Jianlong’s 100% shareholding, they took away 60% of the shares from Ruituo, completing a series of fields from packaging, lighting to display.

"The current competition is not in the market, but in the competition of resources." Han's laser increased the pace of mergers and acquisitions, and the holding of the company such as Yuanheng Optoelectronics, Dazu Equipment, Lusheng and Guoyexing not only realized the successful transformation of the company. It also consolidates its current strong position in the LED market.

What is different from the warlords in the late Qing Dynasty is that China is not only behind the beatings. Some domestic LED companies have joined hands with foreign companies, and they have also taken a step back, acquiring foreign companies, entering overseas markets, and even directly using the patent advantages of acquiring companies to obtain core technology. right.

Xu Yaozhong, assistant general manager of Dehao Runda LED Lighting Division, said that Dehao had considered strategic adjustment in 2006 and started to acquire EPIVALLEY in South Korea. At that time, the patent for LED epitaxial wafers was close to saturation, but the patent of EPIVALLEY in Korea could be global. Sales.

This year, Ming Mingli also acquired a North American company. Fan Banghong, president of Zhen Mingli, said that the acquisition will strengthen the sales force of Zhen Mingli LED lighting and lighting products in the United States and Canada.

In the future, the battle for M&A in the domestic LED industry will intensify, and the two-way cooperation intention between enterprises will become more and more obvious. The mode of development of the group will become the mainstream situation. Shi Yongjun, director of brand management at NVC Lighting, said, "The future of NVC Lighting will inevitably acquire some powerful companies and is currently implementing M&A plans."

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