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LED itself causes investment heat

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LED itself causes investment heat

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   1. In general, the industry is still in a period of short supply, and companies can now obtain higher profits, so expanding investment is also a natural choice. Sanan Optoelectronics' Tianjin project's expected profit margin after tax is as high as 20%.

 
    2. Chinese companies are mainly engaged in the processing and manufacturing of LEDs. Relatively speaking, the capital and technology thresholds for entering the industry are not high. It is estimated that the minimum investment in LEDs is only 100 million yuan.
 
    3. At present, the industry is generally in the early stage of development, and has not formed a leading enterprise with a dominant position. The enterprise has the impulse to compete for the leading position in the industry. Leading enterprise Sanan Optoelectronics' sales revenue in 2009 was only 470 million yuan, and other companies are likely to gain industry leading position by accelerating investment.
 
    4. The Chinese government has always had the policy preferences of supporting large-scale leading enterprises. These enterprises are more likely to obtain various preferential policies and subsidies from the government, thus objectively enabling enterprises to quickly expand their scale.
 
    5. High prices are an important obstacle to the expansion of current industry demand. Expanding the scale may reduce costs and stimulate demand.