1. The Chinese central government and local governments at all levels have adopted various means to promote the development of the LED industry.
1. The central government lays the foundation for the development of the industry mainly through industrial development direction guidance, demand subsidies, research and development support, and standard setting.
In June 2003, the Ministry of Science and Technology joined forces with various departments, industries and local governments to establish the National Semiconductor Lighting Engineering Coordination Leading Group 2006 National Medium- and Long-Term Science and Technology Development Plan (2006-2020) and Information Industry. The "Eleventh Five-Year Plan" and the "Electronic Information Industry Adjustment and Revitalization Plan" in April 2009 all regard the LED industry as the focus of development, and various departments have given special subsidies to the technology research and development related to the LED industry.
In December 2008, the Ministry of Science and Technology released the “Ten Cities and Ten Thousand Miles†plan, selecting ten cities, each city promoted more than 10,000 LED function lighting, and the Ministry of Science and Technology increased the investment amount by 30%-50% according to LED lighting. Subsidy.
In October 2009, the National Development and Reform Commission and other six ministries and commissions issued the "Opinions on the Development of Semiconductor Lighting Energy-Saving Industry" to make arrangements for the development of China's LED industry. It is clearly stated that by 2015, the localization of chips will reach over 70%. LED industry standards for semiconductor lighting terminology, device detection methods, etc. were also officially implemented in 2010.
2. Local governments attract investment through policies such as demand subsidies and investment, research and development subsidies, and promote local industrial transformation and upgrading.
In the Sanan Optoelectronics Anhui Wuhu LED project, the first phase of the total investment of 6 billion yuan, the Wuhu Municipal Government will give a total of about 900 million subsidies to the purchase of 100 production equipment. Moreover, the Wuhu City Housing and Urban-Rural Development Committee will also purchase high-power LED street lights from the company, totaling 600 million yuan, and purchase 200 million yuan each year in 2010, 2011 and 2012.
Second, the current industry characteristics of the LED industry itself is also an important reason for the investment boom in the industry.
1. In general, the industry is still in a stage of short supply, and companies can now obtain higher profits, so expanding investment is also a natural choice. Sanan Optoelectronics' Tianjin project's expected profit margin after tax is as high as 20%.
2. Chinese companies are mainly engaged in the processing and manufacturing of LEDs. Relatively speaking, the capital and technology thresholds for entering the industry are not high. It is estimated that the minimum investment in LEDs is only 100 million yuan.
3. At present, the industry is generally in the early stage of development, and has not formed a leading enterprise with dominant position. The enterprise has the impulse to compete for the leading position in the industry. Leading enterprise Sanan Optoelectronics' sales revenue in 2009 was only 470 million yuan, and other companies are likely to gain industry leading position by accelerating investment.
4. The Chinese government has always had the policy preferences of supporting large-scale leading enterprises. These enterprises are more likely to obtain various preferential policies and subsidies from the government, thus objectively enabling enterprises to quickly expand their scale.
5. High prices are an important obstacle to the expansion of current industry demand. Expanding the scale may reduce costs and stimulate demand.
Third, due to the optimistic development prospects of the LED industry, the Chinese capital market has provided sufficient financial support for enterprises to increase investment.
1. Since 2009, the LED industry has been well received by the capital market. The stock prices of major listed companies have risen sharply. The stock price growth is 1: Dehao Runda, 2.81-20.29 yuan; Shilan Micro 3.35-14.85 yuan; Sanan Optoelectronics 9.55- 89 yuan (estimated value); while the Shanghai Composite Index rose from 1820 points to 3109 points.
2. After the company successively launched the LED investment project financing plan, the capital market gave active support. The financing was smooth and planned to raise 2.98 billion yuan in March this year. However, the capital market is relatively optimistic, and the stock price has risen successively. The stock acquired into the LED industry's Dehao Runda. In 2009, LED revenue was only 170 million yuan, and it also successfully raised 1.56 billion yuan for the construction of Wuhu LED production base.
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