May 19, 2024

The Taiwan factory was forced to "dance with the wolf".

When a competitor finds a door to cooperate, should he refuse or shake hands? Taiwan's second largest LED epitaxial plant, the chairman of the board of directors of the company, Jane Feng Ren, chose to take the other hand. For the first time, the company competed with the onshore competition factory, and the chairman of the board of directors, Yan Feng, gave himself half a year to work out synergy.

On November 12, 2012, China’s Epistar faucet Sanan Optoelectronics acquired a 9.9% stake in NT$2.35 billion and became the first LED joint venture case on both sides of the strait. This is not only the first cause of the LED industry, but also the largest single investment case of land investment.

A capital of only 4.8 billion yuan of enterprises, why would rather be burdened with the fear that the land will be questioned by the key technology of Taiwan LED, but also to achieve this cooperation case?

Sanan plus Yuanyuan's production capacity has been forced to rank among the top three crystallizers in the world's production capacity (hereinafter referred to as Jingdian), and is the vice chairman of Jingdian and Ye Haofu, the chairman of Yiguang Electronics, the largest epitaxial packaging factory in China. Questioning again and again, "it (Yuanyuan) has already invested in the mainland to expand production, the capacity utilization rate is not full, and they can't see the reason for their cooperation." Ye Yufu believes that Sanan's profits are mostly from the mainland government subsidies, but also dig the crystal One hundred talents, why do you choose to cooperate with Jingdian, and would rather take the hand on the other side?

Looking for customer cooperation, no niche
Jane Fen said, "The outside world thinks that I can find customers and cooperate with Taiwanese industry, but I don't think I have much choice."

In the round eyes, finding a partner abroad is a necessary choice for survival. In the market rush, the LED upstream epitaxy has blown up the wind in the past two or three years. With the investment in the second and third-line plants, the company has 286 MOCVD machines, which has the advantage of scale and cost. There are only 100 units in the circle. Jane Feng Ren said that assuming that demand will increase in the future, customers are very worried about the lack of capacity and the cost is too high.

In addition to the first to third quarters of 2012, the net loss after tax of 270 million yuan, the largest loss in the past five years, must join hands to find a way.

In the past, we have been looking for customers such as LG (LGD) and Japan's Mitsui to buy shares to protect the future of the product. But now, "I also discuss with the future big Haikou customers (strategy), they are giving me the direction of cooperation with China (in the same industry), the cost can be reduced."

A general manager of LED downstream enterprises pointed out that the LED industry is now overcapacity, and downstream customers certainly hope that the source of procurement will be a little more. There is no need to invest in upstream epitaxy.

Every need
The road to cooperation with customers is not working, and competitor Sanan is looking for it.

In fact, in the past two or three months, Sanan has also contacted Jingdian, New Century Optoelectronics and Ronda in the same industry, and they have not talked about because of the high product overlap.

Ma Peisheng, the upstream component of LED, the largest sapphire substrate factory in Taiwan and the deputy general manager of Zhaoyuan Technology Marketing Business Department, believes that Yuanyuan will make Sanan a shareholding and complementary market channels should be an opportunity for cooperation.

More than 90% of Sanan’s revenue comes from the mainland market; the opposite is true for the international market.

Sanan focuses on the lighting market, and the main focus is on the LED panel backlight. The two hit it off. In contrast, the round and the crystal are more overlapping in the market, and the conflict of cooperation is high.

In addition to expanding production capacity and reducing costs, another round of calculations is to use the Sanan to attack the largest market for lighting in mainland China.

It is understood that Sanan’s Epistar has been sold to Taiwan’s Yiguang and Hongqi. In contrast, Yuanyuan’s sales to mainland China are not allowed, and the revenue from the mainland is only 7%. Li Manxiang, chairman of Maolin Optoelectronics Co., Ltd., also pointed out that it is very difficult for Yuanyuan to cut into the mainland market alone. Almost all of the Chinese government's lighting market is obtained by land capital. The risk of accounts receivable is high. The circle seems hesitant in the footsteps of the mainland.

In fact, there is no challenge in the follow-up. The two sides want to use each other to obtain China and the international market. However, if the product market is consistent, there will be conflicts of interest. In addition, Sanan wants to enhance production technology through the round and think about it. With Sanan reducing costs and not wanting to let technology out, it will test the negotiation.

Therefore, this round of cooperation will also cause Taiwan’s technology outflow to be questioned. Although Jane’s insistence is to keep the bottom line of the competent authorities, technology and dominance will not give in. He also said: “Everyone talks about technical outflows, I feel very funny, LED Technology is not only from Taiwan, you want to keep the technology at home, but he (the Chinese mainland competitors) can also get the technology out of money." However, the first cooperation case of the LED industry has already let the industry and the government and others Big eyes are fixed.

The pressure is great, but the round must be done. Because, now is the best time to negotiate before the bargaining chip is exhausted.

The LED factory in the mainland is already an opponent that cannot be ignored in international competition. Sanan Optoelectronics, which was established in 2000, took only 12 years. In the first three quarters of 2012, Sanan’s revenue was RMB 2.35 billion, making it the largest in Taiwan. The company's new Taiwan dollar of NT$ 15.5 billion.

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