LED lights to make the market price of Hamburg?

Note: Creating LED industry chain, technical strength and market absorptive capacity is particularly critical. It is reported that the current Great Wall Development has cooperated with a number of industry giants. What is the reason for this?

Chen: Taiwan Jingyuan Optoelectronics is the largest LED upstream manufacturer in the world, and Everlight Electronics is the largest packaging company in Taiwan. In terms of LED chip technology, Epistar is the world’s number one supplier of red and yellow light, the third blue-green light provider in the world, and one of the few companies in the world that can provide high-brightness blue LEDs. Great Wall Development has cooperated with these international giants. They can provide us with leading LED chip production technology and patent support, helping the company quickly cut into the lighting market and shorten the investment cycle. At the same time, Jingye Optoelectronics, the industry giant, can also be aware of the global LED production capacity, control investment and output, and effectively avoid market risks.

The joint venture between Great Wall Development, Epistar and Evergrande was formally registered in April this year. According to the project investment plan, it will be invested and constructed in three phases, and is expected to be completed in 2018. The first batch of LED chips will be produced in the second half of next year.

Take advantage of the market to open the door

Reporter: Although the LED industry is full of attractive business opportunities, it is, after all, an industry that fights for funds, fights R&D strength, and fights for market share. What advantages does Great Wall have to develop into the industry?

Chen: Great Wall Development should say that there are many unique advantages in this industry. These advantages not only help reduce costs, but also help control the pricing power of LED products. For example, Great Wall Development has long been engaged in the manufacture of electronic products. It ranks seventh in the global EMS (Electronic Manufacturing Services) companies, plus nearly one hundred high-efficiency SMT (Surface Assembly Technology) production lines and all-round high-end inspection equipment, with strong manufacturing capabilities. At the same time, there is sufficient financial support.

R&D has always been the strength of Great Wall Development. The fabrication process of epitaxial wafers is complex and requires a lot of technical accumulation. Great Wall Development not only has many patents to support, but also has seven professional laboratories, including CNAS (China National Accreditation Service for Conformity Assessment) certified reliability laboratory and materials science laboratory.

Cooperation with industry giants also highlights their advantages. Not only can we learn advanced technology, but also share its large-scale procurement system to reduce raw material costs. The layout of upstream epitaxial chips also provides chip supply assurance for Great Wall's development and packaging and lighting projects.

LED lights reduce costs is the key

Note: The current price of LED products is still very high. What do you think is caused by this?

Chen: High LED prices is a systemic issue. As an LED chip in the semiconductor industry, its industry business model is "in cash spot," and epitaxial wafers and chips are funds and technology-intensive industries. Therefore, its price is particularly affected by the relationship between supply and demand in the market, which is different from traditional industries. Although there are many LED companies on the market at present, there are not many LED epitaxial wafers and chip manufacturing companies globally. Their products are often in short supply, and prices are naturally high.

Note: In a LED product, what percentage of the cost of each component?

Chen: Take an LED lighting bulb as an example. Among them, the chip cost accounts for about 1/4, the hardware cost accounts for 1/4, the power and consumables cost account for 1/3, and the manufacturing logistics cost is 1/6. . We have a "hamburger" theory internally. If the price of an LED bulb is equivalent to the price of a local hamburger, market demand will be immediately stimulated. However, the current LED luminaires are equivalent to 5 to 6 hamburgers. This shows that, in the process of building the entire industry chain, through integration and innovation, there is still much room for the reduction of product prices.

Note: How to reduce costs is the proposition of life and death of the LED industry. How does Great Wall Development reduce costs while maintaining technological advancement?

Chen: At present, the LED luminaires in the market are mostly assembled by hand. We are exploring with equipment manufacturers how to automate mass production while maintaining advanced technology. For example, a one-man LED factory, a worker can produce 15 to 20 lamps a day, and the entire factory produces 1,500 to 2,000 a day. But if we transform it into fully automated production, if we can increase the output of a day by a factor of 10, that is, between 15,000 and 20,000, this is very impressive.

When the production equipment is automated, the labor cost per unit of time is naturally reduced, and the production cost is also reduced. At the same time, we are still trying to find new materials. If we use innovative new materials to produce, the cost of LED lamps will be lower, which will be more conducive to the promotion of the market and the development of LED lighting industry, benefiting more common people, and on the road of “adjusting the structure and transforming to build the Great Wall of Science and Technology”. A more solid pace.