Upstream: rapid expansion of horizontal integration
In 2010, the upstream chip shortage situation continued from the beginning to the end of the year. That made chip firms earned a lot. A crazy around the upstream chip investment began. However, in early 2011, chip overcapacity alarm is already sounding.
Large enterprises hope through Chief M & A expansion strength to consolidate its leading position while small and medium-size enterprise want to be mergered and acquisited to survive.
Industry sources, the main driving force of the upstream chip companies integrate acquisitions is to expand production capacity and market access to new technology and have the other patent. Therefore, they choose acquisition targets companies with technology, patents, and market advantage.
Midstream and downstream: vertical integration to seize the market
Since 2012, the LED chips and package excess capacity made LED lights supplier exhausted. That also made industry focus began to tilt to the downstream lighting applications which have more market potential. LED lighting has become a new investment hot spot.
The Engineering Industry Research Institute survey data showes in the first half of 2012, the overall scale of the LED interior lighting market witnessed strong growth year-on-year increase of nearly 36% in China. Meanwhile, the number of new LED indoor lighting companies is nearly 1000. Expected the whole of 2013, China LED indoor lighting market size is expected to exceed 25 billion yuan, a year-on-year growth rate of over 40%.
Easy to Merger, Difficult to Integrate
At present, the LED light bulbs wholesale is in the later reshuffle era and the closures have occurred. To develop the prerequisite is required to survive. As long as it is hoped that the development of LED lighting companies want to make up for their lack of LED products, brands and channels with merger integration.
However, regardless of the upstream horizontal integration, vertical integration of the middle and lower reaches of the M & A, all the parties must first clear their intentions and objectives (Patent? Talent? Market?), then work together in order to go better farther according to the desired objectives.
www.tp-ledlight.com was founded in 1996, located in Shenzhen, China. Topband jointly cooperated with Tsinghua University and was approved by Shenzhen government as a high technology enterprise. In June, 2007, Topband was listed in Shenzhen Stock Exchange. Stock code: SZ002139. With fifteen-year's development, Topband becomes one of the leading electronic manufacturers. There are over 300 R&D engineers and about 3,000 employees in the 75,000 square meters Topband industrial park, which equipped advanced machines such as Surface Mounting Machine, Automatic Inserting Machine, with automatic Soldering Machine, advanced testing machines and so on.
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