Thanks to policy promotion and support, China's LED market has experienced significant growth. LED lighting products are now widely applied in various fields like industrial, commercial, and residential lighting. Driven by the expansion of the downstream application market, the scale of China’s LED lighting market has grown rapidly.
According to statistics from the High-tech Research Institute's LED Research Institute (GGII), the output value of China's LED lighting reached 245.4 billion yuan in 2016, representing a year-on-year increase of 16.6%, and continuing to demonstrate strong growth momentum. In the future, thanks to ongoing national policy support, increasing public awareness of energy conservation and environmental protection, the continued decline in the price of lighting products, and the ongoing improvement in product quality, the scale of China’s LED lighting market is expected to keep expanding. By 2020, the industry's market size is projected to exceed 461.4 billion yuan.
LED driver power supplies are an essential component of LED lighting. Driven by the growth of the LED lighting market, the LED driver power supply market has also experienced rapid expansion. According to GGII data, in 2016, China’s LED lighting power supply output value reached 19.8 billion yuan, accounting for 61% of the global output.
In recent years, China’s drive power market has developed rapidly, intensifying competition within the industry. In particular, the small and medium power market, with lower technical requirements, has seen intense competition. Small and medium power LED driver power supplies are primarily used for indoor lighting, creating a large market scale. However, due to the relatively low technical demands for medium and small power drive power supplies, numerous companies have entered the market, leading to extremely fierce price competition. Many companies' gross profit margins have dropped to around 15%.
Since 2016, many companies have gradually exited the industry, but some companies have achieved rapid growth through technological advantages and product quality, such as Serby. From 2014 to 2016, the company not only increased its operating income from 88.82 million to 133 million, achieving a compound growth rate of 22.5%, but also saw its gross profit margin triple, rising from 26.35% to 39.21%. This is no small feat given the challenging LED market environment, making it worthy of study by peers.
In the high-power drive power market, because high-power LED drivers are mainly used in outdoor lighting and landscape lighting, they must meet stringent environmental requirements. The R&D and production thresholds are relatively high, with complex processes, and fewer participants. Competition in this market is less intense compared to the low-power market. Previously, due to insufficient supply meeting the rapidly growing downstream demand, some traditional power suppliers entered this field. However, due to technical limitations, some LED drive power companies encountered more challenges. Over several years of development, market share has gradually consolidated among a few advantageous enterprises.
Currently, leading enterprises in the high-power LED drive power industry have secured substantial working capital through capital operations and have expanded their production capacities significantly. The production technologies and processes of other enterprises have improved, product quality has stabilized, and market competition capabilities have strengthened.
I. Analysis of the Competitive Landscape of China's LED Lighting High-Power Drive Power Supply Market
High-power LED drive power supply is an important segment of the LED drive power market. Due to high technical barriers, brand barriers, and product certification barriers, the market concentration is relatively high. At present, major LED drive power companies in China include Infineon, Moso Power, Shanghai Mingzhi, Yusheng Electronics, Jiansen Technology, Guangzhou Kaisheng, Shilong Fuhua, etc. GGII, through long-term tracking of domestic LED drive power companies, evaluated comprehensive technology, market share, product quality, industry reputation, and other factors. In 2016, we selected the top five enterprises in China's LED lighting high-power drive power supply competitiveness (this list does not include foreign companies and Taiwan enterprises).
01, Hangzhou Yingfei Te
Established in September 2007, Infineon Electronics is headquartered in Hangzhou. The company is a key high-tech enterprise in the National Torch Program engaged in R&D, production, sales, and technical services of LED drive power. The sales volume of LED drive power ranks third in the world.
Prior to 2010, the company mainly focused on developing high-power outdoor lighting drive power supplies, which were mainly used for LED street lights, tunnels, etc. In 2011, it also started to involve itself in indoor low-power lighting power supplies, which were mainly used for lamps, downlights, bulbs, and panel lights. In 2016, the company's revenue reached 632 million yuan, a year-on-year increase of 24%, with 618 million yuan from large and medium power LED drive power sales, accounting for 97.8%.
02, Shenzhen Maoshuo
Shenzhen Maoshuo Power Technology Co., Ltd. was established in April 2006 and is headquartered in Maoshuo Science and Technology Park, Nanshan District, Shenzhen. The company's high-power LED driver power products are divided into constant voltage sources, constant current sources, constant stream modules, and intelligent control drives into four categories and seven series, mainly used in high-power LED street lights and tunnel lights. Major customers include Qinshang Optoelectronics, Foxconn, BYD, Zhenmingli Group, Dehao Runda, Guoxing Optoelectronics, Shandong Zhongwei, Beijing Langboer, Xi’an Liming, and other domestic LED street light and tunnel light manufacturers.
Moso Power currently has two production bases, one in Shenzhen and the other in Huizhou. The factory area of the Shenzhen headquarters is about 30,000 square meters, and the Huizhou factory building is about 50,000 square meters, still under construction. In 2016, Moso Power's LED power supply sales reached 259 million, an increase of 62.86%.
03, Shanghai Mingzhi
The predecessor of Shanghai Mingzhi was Mingzhi Limited, established on July 7, 1998. Headquartered in Shanghai, the company’s LED driver power products range from outdoor functional lighting, landscape lighting, and intelligent building lighting to specialized areas such as automotive lights, medical lighting, CCD precision lighting in industrial automation, and are sold to markets in Japan, Europe, the United States, Southeast Asia, and beyond. Customers include domestic and foreign well-known intelligent system manufacturers, LED application manufacturers, and globally renowned electronic component distributors, including Stanley, Arrow, Acuity Brands, Schereder, Secom, Iguzzinni, Op, Shanxi Guangyu, Haoyang Electronics.
The company’s LED driver power supply is mainly based on outdoor functional drive power. Currently, programmable LED drivers and LED intelligent drivers, LED intelligent lighting control and drive systems are being promoted. In 2016, the company’s basic driving revenue was 103 million yuan, a year-on-year increase of 141%, and intelligent lighting control and driving business revenue was 76.53 million yuan, a year-on-year increase of 30%.
04, Yusheng Electronics
Shenzhen Yusheng Electronics Co., Ltd. was established in 2011 and is headquartered in Shenzhen. It has over 500 employees and is a high-tech enterprise integrating R&D, production, sales, and service. With 50 million in fixed assets,
Yusheng Electronics focuses on R&D, production, and sales of high-power LED driver power supplies. Using its own brand, it also maintains long-term business relations with brands such as Shenzhen Yaohao and Ningbo Lesotho Lighting, gradually winning the market with reliable product quality and service. Total sales volumes have increased steadily year by year, making it a well-known supplier of LED drive power in South China.
05, Jiansen Technology
Founded in 2010, Shenzhen Jiansen Technology Co., Ltd. is a Sino-foreign joint venture funded by China, Japan, and Taiwan. The company is a national high-tech enterprise integrating R&D, production, sales, and service. At present, the company's growth momentum is very rapid, having become a dark horse in high-power LED driver power supplies. In 2016, the growth rate of Jiansen Power exceeded 100%. Currently, the cooperation targets are domestic first-tier manufacturers, mainly in South China, North China, Southwest China, and East China. In terms of exports, it is mainly based on European and American regulations.
Second, Analysis of the Competitive Pattern of China's LED Lighting Medium and Small Power Drive Power Market
LED lighting medium and small power drive power supplies are mainly used in indoor functional lighting drive power fields. Due to low technical difficulty and more entrants, the market share is relatively dispersed. In 2015, it was a very difficult year for most LED lighting companies, and small and medium power LED drive power companies also felt the pressure. In 2015, a large number of more than 10% of LED drive power companies (mostly small and medium power LED drive power companies) withdrew from the market. In the second half of 2016, with the overall recovery of the LED industry, small and medium power drive power companies had the opportunity to recover, but the overall situation of price competition and low gross margins in the small and medium power supply industry has not been effectively improved.
Facing fierce price competition, power supply manufacturers are constantly adjusting prices, and power supply costs have bottomed out. Even more challenging is that some raw materials are still rising in price in 2016, and labor costs are also increasing. Therefore, there will be a large number of small-scale power supply manufacturers going out of business in the next year or two.
In fact, in 2016, two main LED small and medium power drive power companies, Deli Optoelectronics and Ruigu Technology, decided to clean up and convene suppliers for debt reporting and liquidation due to overcapacity and industry triangle debt. In the future, the LED power supply industry will tend to concentrate in the direction of development, meaning the bigger the big factories get, the smaller the small factories become, or even swallowed or closed down.
In 2016, it was a tough year for many small and medium-sized LED power companies. However, for companies with a certain scale and good customer quality, it was a year of struggle, reduced competitors, and market concentration, which boosted their confidence in the future market.
GGII selected the top five enterprises in China's LED small and medium power drive power competitiveness in 2016 through long-term tracking of domestic LED driver power companies, evaluating comprehensive technology, market share, product quality, and other factors.
01, Igor
Igor Electric Co., Ltd., formerly known as Risheng Electric Manufacturing Co., Ltd., was established in 1999 with a registered capital of 98.99 million yuan. The company has three production bases in Shunde, Nanhai, and Chancheng. The main product series include five types: inductive mode power supply, electronic mode power supply, special transformer, power transformer, and transformer core components. They are widely used in lighting, electricity, new energy, industrial control, and other industries.
GGII research shows that Igor LED driver power products include European, Chinese, American, and waterproof series, mainly used in ceiling lights, downlights, outdoor landscape lights, street lights, etc. In 2016, Igor's LED driver power supply sales amounted to about 400 million yuan.
02, Leyford Optoelectronics
Shenzhen Laifu Photoelectric Co., Ltd. was established in 2007 with a registered capital of 48 million yuan. It has established R&D and production bases in Shenzhen and Sichuan. Currently, it has over 1,000 employees, with an office and factory area of over 40,000 square meters, and an annual output value of 250 million yuan. The company’s main products are LED lighting power sources such as lamps and panel lights.
GGII research shows that Leyford has a good reputation in the industry, particularly its LED panel light power supply, which makes the company one of the domestic leaders in LED indoor functional lighting power supplies.
03, Saiby
The company is a national high-tech enterprise mainly engaged in R&D, production, sales, and service of LED driver power. The company and its predecessor’s main business is the development, production, and sales of inductor transformers, mainly providing supporting services for LED driver power manufacturers. Based on the company’s accumulated advantages in the inductor transformer industry, in order to meet the needs of strategic development, the company gradually explored the downstream LED driver power industry, making significant progress in the design and production process of LED driver power in 2010 and starting business in 2011. It has extended to the LED driver power industry. In 2016, the company’s operating income reached 133 million yuan, with a gross profit margin of 39%.
04, Kegu Power Supply
Guangdong Kegu Power Co., Ltd. was established in 2008 with a registered capital of 10 million yuan. It is a high-tech enterprise of LED driver power supply with integrated R&D, production, sales, and service. It develops and produces LED driver power with independent intellectual property rights. Stable and obtained ENEC, CCC, UL, TUV, CE, CB, SAA, SEMKO, RoHs and other domestic and foreign authoritative certification institutions. In 2016, the sales of Kegu Power LED driver power supply was about 103 million yuan.
05, Ochs
Ochs is one of the first companies in China to develop, manufacture, and sell LED lamps. As LEDs became more familiar and accepted by consumers, competition in the LED lighting market became increasingly fierce. Ochs shifted the company’s core products toward the development and production of high-end LED dimming power supplies. In 2008, the company changed its name to Ochase Industries. After more than 10 years of development, Ochase Industrial has become a leading supplier of LED dimming power supplies and control systems and a provider of intelligent lighting solutions.
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