China-US trade war, how the LED driver supplier should react

                In the next half year, with the domestic environmental protection become more stricter, the news are spread around said the price of aluminum housing LED driver’s raw material PCB will increasing. On July 4th, including the world's largest PCB production company, the Kingboard holdings limited, and Shandong Jinbao etc. Also other China domestic-based PCB indicator factories all reported that CCL will raising in July. Vendors admit that because of the stricter environmental protection, the production cost will increase, and the price must increase to reflect the cost trend.

               As we all know, some accessories of waterproof LED driver, such as PCB board, housing, etc., will cause largely pollution during the production process, and the production level of some small and medium-sized raw material suppliers does not meet the increasing environmental protection requirements of the country, they have to be rectified and Industrial upgrading, which indirectly increases the cost of these accessories. Meanwhile, the state has been carrying out supply-side reformation in recent years, it is committed to improving the profitability of industrial enterprises. Whether it is environmental protection upgrades or supply-side reformation, it will be a continuous and long-term process, which means that the price increase of such raw materials will continue.


                 
 
               
                 In addition, the country began to conduct environmental audits for many electronic manufacturing and chemical materials industries, especially added the new environmental protection tax this year, which further increased the production costs of enterprises. Therefore, some insiders predict that under the current increasingly strong environmental protection storm, there will be at least one batch of small and medium-sized PCB manufacturers facing the tide of closure this year.

                Of course, it will also have a profound impact on our downstream plant growing light LED driver industry, especially with the further development of small-pitch technology, and the continuous rise of overseas and high-end markets, the demand for small-pitch LED industry has also increased, which has also led the dimming LED driver industry have booming demand from upstream raw materials PCB. The PCB price increased means that the relationship between supply and demand is once again out of balance, and raw materials are in a situation of short supply.

               For many downstream flood lighting LED driver companies, the next situation is to face the problem of “urgent lead time”. Of course, "benefit" in the wave of raw material rising prices and material out of stock, many companies have become accustomed to this unstable situation, and be ready to prepared the stock in advance, this stock solution can better cope with this material raising price storm, but such preparation brings pressure on the capital, it’s a challenge to a company’s capital strength.

              In this consuming constantly evolving market, street light LED driver factory want to perfectly absorb these pressures, should focus on technology and product upgrades, continuously optimize brand and service capabilities, take the road to the ultimate development path, improve the value of products and solutions, and win greater profit margins, so can well digest the pressure from rising raw material prices. Who really get hurts are the channel dealers and traders who do not produce their own products. Raw materials prices have risen, and companies have to maintain the original price, or even cut prices to stabilize the market, which has severely squeezed the profit margins of channel dealers and traders, and even jeopardize their survival. Once a new round of shuffling is initiated, such an individual business will most likely become abandoned.

 
             Is it a crisis or an opportunity? Whether it is price increasing or price decreasing, the market will always change. Only with a good card can we maintain bargaining power and turn crisis into opportunity!

   
   ------szfsled02@szfsled.com

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