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Competition Pattern Of Chinese LED Packaging Market Changes, How Manufacturers Meet The Challenge?

In the past ten years, the development of China's LED industry is undoubtedly successful. It can be said that it has developed from an industry without technology or scale to an industry with core technology and the largest manufacturing scale in the world.

However, it has to be said that up to now, the biggest advantage of China's LED industry is only manufacturing advantage. Although the technology is improving every year, there is still a gap with the international factory, especially in the high-end application field; In terms of patents, the gap with international manufacturers is even larger, especially in developed markets such as Europe and North America. Patent problems make it difficult for many domestic brands to exert their power.

Industry chain competitiveness is enhanced, packaging pattern changes

Since the advantages in the manufacturing, it is necessary to give full play to the advantages. Therefore, in the past few years, we can see that both chip and LED package industries are expanding their production in order to enhance the competitiveness of the industrial chain and further expand their manufacturing advantages.

With the further expansion of domestic manufacturing advantage, the production cost of international manufacturers increases in disguise. Therefore, it can be seen that the international factories basically did not expand production in the past few years, but gradually transferred orders to Chinese manufacturers for OEM production. This is the capacity transfer we have been talking about. However, the technology patents of manufacturers in Taiwan are relatively weak compared with those in Europe, America, Japan and South Korea. Therefore, their competitiveness mainly relies on manufacturing, which is naturally inferior to that in mainland China. Therefore, you can see that many LED manufacturers have been marginalized or even disappeared in the past decade. How did the company respond? One solution would be to move the manufacturing base to the mainland. In fact, many Taiwanese companies already do.

Therefore, the current Chinese LED packaging industry competition pattern is changing, from the past three camps of international factory, Taiwan factory and mainland factory, gradually evolved into the current foundry (behind the international factory), Taiwan factory in the mainland manufacturing and mainland factory, three camps, and the industrial environment is almost the same.

Under the new pattern, manufacturer competition is still lasting

In the early stage, the industry environment was different and the product positioning was different. Each camp had its own market and corresponding profit space. The current industrial environment is the same, market competition is difficult to ease in the short term, the profitability of manufacturers is a good example.

Competition pattern of Chinese LED package market changes, how manufacturers meet the challenge?
It can be seen that in 2016-2017, although the LED industry recovered significantly and the industry concentration gradually increased, the manufacturer's gross profit margin decreased instead of increasing, which is enough to show that the packaging market competition has not been alleviated.

In addition, in the past few years, China's LED packaging industry has been faced with a very embarrassing problem, that is, manufacturers with rapidly growing revenue scale are mainly OEM factories. An order from an international customer may elevate the scale of the company to a higher level. Although we all know that the profit of contract manufacturing is small, but the international manufacturing order is still hot, we all want to compete for it. Production capacity transfer is already irreversible. For Chinese manufacturers, this is definitely an opportunity for rapid expansion of enterprise scale. So how to win this battle?

In the production capacity transfer tide, how does the manufacturer take up this baton?

Production capacity transfer is the product of manufacturing advantage. Manufacturing is the core. For LED package manufacturers, improving manufacturing capacity is the next key step. The next direction of the manufacturing industry is undoubtedly intelligent manufacturing, which is reflected in informatization and automation, and then the production system can be further optimized through big data analysis, so as to continuously improve the competitiveness.

Most of the current LED packaging and manufacturing production lines can achieve mechanical intelligence, but there are still some non-intelligent links, leading to the whole LED packaging process can achieve intelligent closed loop, glue is one of the pain points. The current status of LED packaging manufacturers in the dispensing process is as follows:

1. Most manufacturers still use manual operation in the dispensing process, which will increase the dispensing error rate. For example, in the case of AB glue addition, because it cannot be found in the whole production and shipment process, it will only be found after the customer uses the finished product and uses it for a period of time. Once such problem appears, it's small thing to lose order, but it's a big deal to affect enterprise brand or credit.

2. Due to the need for a large number of personnel to complete the dispensing process, the labor cost is increased, which is not conducive to the cost control principle. In addition, the uncontrollable operation of personnel not only increases the error rate in the production process, but also wastes raw materials.

3. The mixing process affects the rate and directly affects the comprehensive cost.

The influence of glue matching is much more than the above points. It has always been the pain point of packaging industry. If the solution is not good, it will directly affect the comprehensive competitiveness of manufacturers. In the environment of capacity transfer, it is not conducive to the cooperation with international customers. In view of this pain point, there is a corresponding solution in the market, Shenzhen bull's eye matching technology co., LTD., through long-term scientific research, launched a high precision automatic rubber powder matching machine, and the main packaging process to form a seamless docking, truly realize the packaging process intelligent closed loop.
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