China starts LED lighting subsidies; still very few details available

China's central government will subsidize the qualified LED lighting companies in order to lower the selling price, which will eventually benefit the end-users. It seems to be a good sign for LED companies in China, however it continues to be a long wait for any more specific details

03/12/2012


IMS research: excellence in market intelligneceRecently China’s central government announced the bidding program for LED lighting products to encourage LED lighting applications on 28th February, 2012 (http://www.sdpc.gov.cn/tztg/t20120228_464014.htm).

According to the program, it will subsidize the qualified LED lighting companies in order to lower the selling price, which will eventually benefit the end-users. The bidding packages include both indoor (down lights, PAR lights) and outdoor (street lights, tunnel lights) products. It seems to be a good sign for LED companies in China, however it continues to be a long wait for any more specific details.

There have been many rumours about China LED lighting subsidies since last year, such as the possibility of 8 billion RMB (about US$1.2 billion) for purchasing LED street lights or other outdoor lighting through to 2015. To Chinese die producers, this might not help much though in my opinion. Currently outdoor products mostly use imported dies from international companies like Cree. It’s widely acknowledged amongst industry insiders that Chinese companies don’t yet have the technical capacity to produce high quality multiwatt die. From a technical side, Chinese manufacturers still need time to catch up. However I personally think the supposed inability of Chinese manufacturers to produce these products has also been overstated a little. I think often within China the purchase decision to go with Cree or another foreign manufacturer (e.g. Lumileds, Osram) for street lighting or other general lighting is also really a “safe” decision. With quality considered important in both central and local government projects, if the products fail the purchaser or specifier can point to the fact that they chose an internationally recognised LED/lighting manufacturer with a stronger reputation. 

I also believe Chinese companies cannot depend too heavily on subsidies. Firstly, the current information is very vague and little detail has been provided. It doesn’t make sense to base a business plan on rumours. Other factors are also important, such as making relationships with the decision makers responsible for government projects, which will be a very important part of the LED market in China and may require complex processes to win.

From our monthly tracker on LED lamp retail price, we see LED lamps price decline quickly in China market as more and more companies join in the battle, but the LED penetration rate is quite low compared to other technologies, like CFL. For example, while LED lamps and very widely available online, you do not normally find one in a supermarket in China.

The below table is from IMS Research’s lighting report. In 2015, 9% of all sockets in China will have LED lamps installed with growth of 95% (CAGR) while 16% of sockets will have a CFL installed.

China lamp installed base, Source: IMS ResearchCompared to developed regions like Japan and North America, implementation of additional government subsidies, while it shouldn’t be depended on too much, is needed to accelerate LED adoption in China. The higher cost when compared to incumbent technologies and the lower purchasing power of residents are is the main reasons for this. Environmental awareness also needs to be strengthened among citizens.LED lamp, luminaire penetration by region, Source: IMS Research



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
World-class maintenance: The three keys to success - Deploy people, process and technology; 2016 Lubrication Guide; Why hydraulic systems get hot
Your leaks start here: Take a disciplined approach with your hydraulic system; U.S. presence at Hannover Messe a rousing success
Hannover Messe 2016: Taking hold of the future - Partner Country status spotlights U.S. manufacturing; Honoring manufacturing excellence: The 2015 Product of the Year Winners
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Digital oilfields: Integrated HMI/SCADA systems enable smarter data acquisition; Real-world impact of simulation; Electric actuator technology prospers in production fields
Improving flowmeter calibration; Selecting flowmeters for natural gas; Case study: Streamlining assembly systems using PC-based control; CLPM: Improving process efficiency, throughput
Putting COPS into context; Designing medium-voltage electrical systems; Planning and designing resilient, efficient data centers; The nine steps of designing generator fuel systems
Warehouse winter comfort: The HTHV solution; Cooling with natural gas; Plastics industry booming

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me