“It’s always been difficult to talk about horizontal integration. So where is the difficulty? A big company buys a small business, and the two can do the same. Why do you want to find another place to manage?†in 2016 Zhang Xiaofei, chairman of the annual high-tech LED annual meeting, proposed.
In fact, the upstream has basically not acquired small businesses, and the cost-effectiveness of updating equipment is much higher than before. Although the package can be combined according to the product line, many small and medium-sized packaging companies have not yet felt "dead to the end."
At present, the integration of the entire LED industry chain is mainly based on the integration of lighting companies, and the others are reversed, such as the capital increase method in the middle reaches. This capital increase is not a merger, it is to ensure the stability of the supply chain. The price is stable, which is also based on long-term considerations.
The other part is overseas mergers and acquisitions, there are successful cases, and of course there are cases of failure. Overseas mergers and acquisitions mainly include large and medium-sized enterprise acquisitions, large enterprise acquisitions, and cross-border acquisitions. Among them, cross-border acquisitions will always be China's acquisition of foreign countries. This is the way China really wants to enter international channels.
Some companies are entering the new energy industry, such as Hongli Zhihui, from the Internet of Vehicles to new energy vehicles, and even to lithium batteries; and some from the display to education, sports and other aspects. In fact, what the future education will look like, we still have to wait and see. But for now, some companies are even better than LEDs after the acquisition, which is worth learning.
Then, will the integration of the upstream, middle and lower reaches industries form a supply chain camp?
Xie Mingxun, deputy general manager of Jingyuan Optoelectronics, said that integration will definitely become the glory of the camp against the camp, which is inevitable. Our camp starts from the middle, and from the application, it looks for a package partner and connects it into a camp. Each application will have a different camp.
It is worth mentioning that Jingyuan Optoelectronics was the first to do AC, even Samsung did not have it early.
So, will the packaging company choose the camp?
Xie Zhiguo, deputy director of Guoxing Optoelectronics R&D Center, said that the packaging camp has been formed, including the middle and downstream, and now it is relatively strong. Although the packaging company has some say, it is still in a weak position.
In fact, Guoxing Optoelectronics itself has an upstream, so Jingke Electronics?
"We choose a specialized division of labor, this camp exists. The package is in the middle stage, influenced by upstream prices and terminal prices, and guided and coordinated in the middle, more through technical solutions." Zheng Yongsheng, general manager of the electronic LED business unit mentioned.
It is undeniable that for the midstream package, there is not much right to speak about price increases.
According to Sun Ning, president of Lianchuang Optoelectronics, "For this camp, there are two types, one is internal to the group, the other is external, and the strongest camp is the most vital."
Li Zhaohua, general manager of Mingwei Electronics, believes that "we are also a vulnerable group. Our strategic approach, integrated circuits and traditional ones have some differences. We are creating performance, function, and making it a life and cultivating products."
From this point of view, the upstream is really helpless, the downstream will certainly tolerate a part, the most despising is the downstream. Because, once the production line stops in the middle reaches, it is very painful for the downstream. Zhang Xiaofei said, "Everyone is still a little relaxed on the upstream. After all, the upstream has suffered for many years."
Liu Gang, general manager of Tongguang Optoelectronics Environment, said frankly, "The upstream is really fortunate that there is no alliance. The manufacturers in the chip have not formed a real alliance. But for the same party, we did not pass the other manufacturers in 2016. Anyway, Tongfang took a step and adjusted the price."
All in all, in 2017, it should not be a pattern of rising together, which is very chaotic. Instead, everyone negotiates and communicates to understand where the nature of the rise is, and can reduce some unnecessary costs, including labor costs and management costs, through various links.
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