Automotive LED plant to seize new business opportunities

Vehicle LED Market Takes Off Taiwan Plant and Grabs New Blue Ocean

Overcapacity in the upstream of the LED industry has led to imbalances in supply and demand and price collapses. LED industry players are actively developing niche-type markets in different application areas. Automotive LED has become the industry's new blue ocean market, and the safety specifications for automotive lighting are strict and certified. Over time, the cost of manpower and resources to invest in certification is high, and the opportunity to break into the automotive lighting supply chain is relatively low. However, once it enters the car lighting, it will be able to win long-term and stable orders, plus market interest. Base, product gross margin performance is also relatively good, which is the main reason that LED factories actively want to enter the automotive market in recent years.

The automotive LED market has gradually grown with the EU’s stricter carbon emission standards for automobiles. In 2013, the European Union relied on new orders and passed a draft law requiring that the average CO2 emissions per kilometer of new vehicles sold by the European Union by 2020 The 130 grams to 95 grams, the EU is expected to be more stringent vehicle emission regulations, depot use of automotive LED lighting has been quite high proportion. Whether in the headlights, taillights, interior lighting, instrument panels, and other automotive LEDs, they have become the blue ocean markets that every plant is pursuing, including Jingdian, Yuyuan, Lunda, Yiguang, Dongbei, and Lite-On. Taiwan, Lian Jia, Li Qing and other Taiwanese factories have all been trying to seize the automotive lighting market.

It is actually difficult to enter the supply chain

Automotive LED lighting is a niche market with a higher gross profit. Although Taiwanese companies are coveting this market, the difficulty in lighting supply chains for road vehicles is not low, and the safety of automotive lighting is the first priority. The verification period of the depot product is long. The LED plant that wants to enter the automotive lighting supply chain must constantly pay for manpower and resources to conduct product testing and communication with the original factory and car lamp factory. Furthermore, the LED lighting products used by the international depot are still global Major brand factories are preferred, and it is not easy for Taichang to break through.

Access to supply chain orders and gross margins are guaranteed

Due to the long certification time and process, once it enters into the automotive lighting supply chain, the cooperation relationship between the LED plant and the depot or car lamp factory will tend to be stable. The possibility of the original factory replacing the LED supply plant is relatively low compared to other industries. In the long run, the LED plant will be able to maintain a stable order length and order quantity, while the gross profit rate of LED lighting used in vehicles is also relatively good. This is also the main reason why Taiwanese plants have actively sought to rush into the automotive LED market in recent years.

LED factory layout

In recent years, Guangbao has entered into the automotive LED supply chain through its subsidiary, Dunyang, including the supply of front and rear lights and interior lighting. As automotive LED lighting has become the standard equipment for automobiles, Taiwan Plant has continued to enter into the automotive market with good news. Li Ching and Lian Jiadu, which specialize in the niche market, have won orders from major manufacturers. Li Qing’s current largest customer is S.KOITO is a joint venture between SAIC Motor Corporation and Japan Kosaka Lights. After many years of hard work, Taichang Lianjia has successfully entered the automotive LED supply chain for European and American cars. It supplies car headlights and taillights to international customers. Its automotive LED products account for 60% of overall revenue and its future growth potential. Still full.