China's colossal LED makers are making forays into Korean market

China's gigantic LED companies are descending on Korea. Considering that the LED lighting is relatively more expensive in Korea, they are making inroads into the Korean market with super-low-priced products. The domestic led high bay light for sale companies are tensed up.

According to industry insiders on July 27, recently MLS, a Chinese LED maker, began to sell lighting products through the exclusive distributor in Korea called 'optoleds.' MLS is not well-known in Korea, but holds an unchallenged position in China. This company became the first Chinese company to be included in the top 10 companies in the global LED market. If it maintains the current growth trend, some forecast that it will catch up with Japan's Nichia, ranked No. 1 in the industry, in a few years.

About 87% of MLS 'total sales come from LED package products. Most of them are lighting products. The company is already No. 1 in the world when it comes to LED package production. Last year its monthly production quantity was 13.45 billion, and it is expected to reach 20 billion this year. Its sales target for this year is double that of last year, ie RMB6 billion (about KRW1 trillion).

MLS 'biggest competitiveness is the reduced manufacturing cost through large-scale production. The company internalized the adhesive used to bond the lead frame (L / F), ie the metal substrate that raises the semiconductor chip for bonding, and the chip. So, it can reduce production costs. Also, it can capitalize on large demands to purchase LED chips at a low price.

Back in 2012, MLS released an LED light bulb at $ 1 for the first time in the world. It can be said to be similar to 'Xiaomi' that is growing fast in the Chinese market with a low-priced smartphone strategy.

'KINGSUN,' competing with MLS for leadership in the Chinese LED lighting market, also entered the Korean market through a domestic partner 'Digisys.' This company recently entered into an agreement worth $ 10 million with the Eland Group, and supplied its products to the NC Department Store and Newcore Outlet. The company is investigated as some of its products are suspected of violating KC certification, but it is still aggressive in the Korean market.

The domestic lighting industry is extremely alarmed because of Chinese companies' invasion of the Korean market. The consensus is that a 'chicken game' based on price competition is close at hand. Accordingly, some companies are busy coming up with countermeasures, eg lowering the prices of existing LED lighting products or using a premium strategy.

"As the Chinese government picked cree xsp series led street light as an item it will intensively develop in the future, it is actively supporting related companies," said industry experts. "We must also urgently find ways to enhance the competitiveness of the LED industry at the national level . "

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