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The Development Pathway of China’s LED Industry Technological Innovation

Author: WangLi
Tutor: QianYong
School: Dongbei University of Finance
Course: Industrial Organization
Keywords: industrial technology innovation LED industry action of a patent game theory
CLC: F273.1
Type: Master's thesis
Year: 2011
Downloads: 286
Quote: 0
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In 2008, the outbreak of the US sub-prime mortgage crisis threatened global economic growth. The size of the loss caused by the crisis has exceeded expectations. When countries realized that their financial supervision was ineffective, they began to develop new strategies to stimulate economic growth, the important one of which was to nurture new industries to lead the world in technology. Faced with the changes in the world economy and the pressure of domestic resource consumption and the ecological crisis, Chinese government raised a plan to develop new strategic industries in order to take a chance of the new scientific revolution and to have the initiative in development. Currently the new round of emerging industries boom has sprung up and grown to fulfill national energy saving and environmental protection targets set in the 12th Five-Year Plan. LED products, the fourth-generation illuminating source or of green lighting with featuring energy saving, environmental protection, safety and long service time, is recognized worldwide the high efficient lighting industry with the most promising future.LED industry is a complete set of LED industry chain around the world including substrate underlayment manufacturing, epitaxial growth, chip manufacturing and encapsulation appliance, among which underlayment manufacturing and epitaxial growth are called the upper stream of LED industry, chip manufacturing called the middle stream and encapsulation appliance called the downstream. LED industry can grow better by studying its development situation, market circumstance, global competition pattern and innovation ways of industrial technology. This paper’s analysis are as following:The paper considers LED technological innovation as an important factor From the aspective of demand and supply. On one hand, there is a marked reduction in the cost due to industry technological innovation. With the per capita income increased, It has been diversifying market needs. At the same time, LED energy-saving lamps have been beginning large-scale municipal lighting used, and making the sharp increase in government procurement actions. which led to a great market demand. On the other hand, The supply for LED products has also raised because of the production efficiency combined with technological innovation.Whether demand surpasses supply or not, it’s still need to wait and see the appliance situation of the innovational technology. Nowadays, the situation of demand in excess of supply has changed worldwide, and the possibility of supply surpassing demand that happened in 2011 gradually increased.Based on the features of LED industry chain, this paper studies LED’s competition pattern:Asia, America and Europe are the top three excellent performers in the global LED industry, with the core patents still grasped by the world’s five largest manufacturers. However, with the development of LED industry innovation recent years, China LED industry has entered into the prime of its development due to the unilateral restriction of patent transfer being out-of-date and patent authorization becoming gradually increased. Through experience accumulation in the field of encapsulation appliance and the development of capital market, China has prepared itself for developing towards the upper and middle stream of LED industry chain. Therefore, this paper draws a conclusion that China LED industry should firstly develop the downstream of its chain, and then develop towards the upper and middle stream of LED industry chain when the time is ripe.Compared with the global industry, China LED industry can develop following this way:the upper stream can take up the scientific frontier through carrying on the way of cooperation and innovation with the integration of Industries, Universities and Research Institutes; the middle stream can seize the market after grasping the key technologies and core patents through studying and introducing the global advanced technology; the downstream can focus on independent innovation, considering the manufacturing of the products with self-owned intellectual property rights as the top priority. But this way can change with the specific condition transforming. The competitiveness and innovation ability can be improved through industrial technology innovation. To occupy the global market, China should carry on independent innovation to grasp the core patents and key technologies, take up the industrial frontier, achieve leap-forward development and improve the competitiveness.

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