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 One reason: the survival of the fittest overcapacity

     Current LED market has been saturated, LED industry instant success, overcapacity, vicious competition are common occurrences, a variety of corporate cohabitation, everyone insisted, even at a loss but also production. However, the city is in such a case, LED industry has once again become the capital in the eyes of the meat and potatoes. led industry enterprises contrarian expansion, there is nothing to do with the business to enter the LED industry, which will inevitably result in further exacerbate overcapacity, competition in the market to deteriorate further. From this level that blindly follow the trend, expanding production capacity, not only can not the business bigger, but bigger and smaller, until they are ruthlessly eliminated. So, not because of the great and worth.

Two reasons: too meager profits financing difficult

Surplus capacity caused between enterprises vicious, the led industry downstream enterprise product prices continued to fall, profits naturally be diluted. Currently the LED industry gross margin is only about 20%, while net profit is less than 5%.

  Addition to the profit margins are compressed, SME financing problem has also been difficult to climb the "big mountain."

     led the industry widespread "chain debt" problem. Many companies work with suppliers, companies rely on credit to ensure the flow of funds. In accordance with the general rules within the industry, many people choose to upstream suppliers of raw materials on credit, while allowing arrears downstream customers in order to maintain long-term business orders. In this cycle arrears chain, once the company's sales market instability or decreased profit margins, product quality can not meet customer requirements, this debt chain breakage occurs.

    Reason Three: The "bad lot" flooding the market

    Just collapse of the "male mind" in the town mainly to do low-end products, and such products in the industry known as the "bad lot" feature is cheap, quality is not guaranteed.

   In Zhongshan, more than three can buy a bulb, and in some places this type of led lights may sell tens of dollars or even hundred dollars. On the one hand to do the low price, the other is to make money, some companies will start in product quality hands and feet. Tampered with things simply failed, is not up for sale, but in the face of intense competition, you do not someone else do it.