LEDinside has recently interviewed President Xu Hong of Shenzhen Kena Co, Ltd, to find out how this company and other medium and small LED enterprises in Shenzhen will take advantage of the immense opportunities in the LED industry.

 

Dedicated to the LED industry since 1997, Shenzhen Kena Co, Ltd. currently provides LED packaging and applications as its main business. Its LED application products include LED streetlights, tunnel lights and mine luminaries. Like most LED packaging and application providers in Shenzhen, Kena is actively researching and developing relevant technologies, and has captured the market with its cost advantage of raw materials and manufacturing.

 

How does the company plan to take advantage of the current development opportunities in the LED industry?

 

Facing the immense opportunities brought by the LED streetlight project which involves 21 Chinese cities, the medium and small LED enterprises in Shenzhen are making every effort to win in the market competition. Kena is now in talks with a couple of cities for seizing the opportunity, said Xu. The overall cost of the company’s LED streetlights, including material cost and manufacturing cost, is comparatively low, he pointed out. In the current price structure, the cost of the chip has the most significant influence over the total raw material cost. And Kena is mainly adopting Taiwan-made LED chips. Kena’s streetlights reach the 50lm/W luminance standard in the criterion of Guangdong, and products of different brightness and color temperature can be made according to requirements of customers. The current KN-800 series LED streetlights have luminance up to 80lm/W.

 

Meanwhile, the LED companies in Shenzhen like Kena have obtained relevant certifications to demonstrate the credibility of the company and products to their customers. Xu noted that Kena’s products are CE/UL listed and its has also obtained the national CQC certificate in 2009, which is a non-compulsory certificate. Ken’s streetlight products have also been certificated by specialists in Shenzhen Science & Technology Bureau.

 

Xu said that the pricing of LED for lighting applications is rather disordered for the time being, while he believes that time is the best measure of success, and only companies that provide quality products will eventually survive. The price can be cut down easily by any manufacturer, but the quality is determined by technology development, raw material and manufacturing process control, he said. Therefore, the companies should set sight on providing products of both acceptable market price and consistent quality.

 

There are many LED packaging and application manufacturers in Shenzhen, while there is not a single LED chip maker providing chips to these downstream companies. Xu said he has never heard any local LED packager adopting chips made by local chipmakers. Therefore, he expects there to be local chip providers in Shenzhen, like San’an in Xiamen, Lumei in Dalian, Shilan in Hangzhou and Lanbao in Shanghai, etc.

 

Currently, the company is mainly adopting LED chips imported from Taiwan or made by domestic manufacturers like San’an and Lumei. Some of the homemade chips also have good quality, Xu said. LED chips from Shenzhen’s local chipmakers would be chosen before others if there were any, he said, for in that case, the quality problems could be conveniently communicated and resolved. If the chips are imported from foreign countries, it would be difficult for the whole LED industry to develop from upstream to downstream. Moreover, many end customers require the products to contain chips from foreign companies like CREE and Nichia as a must, which should be a result of the low recognition of locally produced chips. Brand recognition, together with the patent issues, have limited the development of domestic chip industry, and further impeded the healthy evolvement of Chinese LED industry.

 

Xu said the company will mainly focus on the expansion of existing product series in the future, and will provide high quality products of low optical decay rate, high brightness and good thermal performance.

 

LED packaging is likely to evolve in a more specialized direction, with some companies focusing on providing DIP packaging and others sticking to SMT packaging. And currently Kena is providing both DIP and SMT packaging. 

 

The packaging providers mainly make products according to the specifications by clients, and since the range of specification is quite wide, no finished products are sold on the market. Another trend is that the LED packaging providers are all expanding into the LED application field, Xu added, and Kena was also built on packaging, and then gradually stepped into the application field.

 

The trend of application products is that when prices fall, sales rise, he said. The extent of price drop mainly depends on raw material cost, especially the chip cost. He said he believed the outlook of LED industry would be bright.

 

As one of the typical LED packaging and application providers in Shenzhen, Kena represents to some extent the small and medium LED enterprises in its optimistic attitude towards the current opportunities in LED industry. There are many packaging and application manufacturers in Shenzhen - the largest LED lighting industrial base in mainland China. However, as there is no significant government involvement, most companies depend on their own strength for growth and development,

 

The vacancy of an established upstream chipmaker in Shenzhen still needs to be filled.

Shenzhen Century Epitech, a company that is expected to become the world’s largest LED chipmaker, has not begun mass production, nor has it communicated with or provided chips to local downstream companies, thus it is yet to be recognized among the LED industry in Shenzhen. There have not been any reports of Shenzhen Fangda Guoke Optronics Technical providing major amount of chips to local LED manufacturers, either. Therefore, given that neither the LED packaging and application manufacturers in Shenzhen, nor the two upstream companies have taken advantage of their initial presence, there is still sizable opportunity for new chip manufacturers to capture this market in Shenzhen.