VietNamNet Bridge - The domestic LED (light-emitting diodes) market has been developing rapidly but chaotically in recent years.

The LED market has been developing rapidly

Nguyen Phan Kien from the Hanoi University of Science & Technology said that until 2014-2015, LED development in Vietnam had gone slowly. 

The products available in the market at that time were mostly cross-border imports or low-quality, cheap Chinese items. High-quality products were also brought to Vietnam, but were used in only a few projects.

Meanwhile, LED application has begun to speed up in Vietnam. LED lamps are now made by Vietnamese companies Rang Dong Rang Dong Light Source & Vacuum Flask JSC and Dien Quang Lamp.

Tran Dinh Bac, deputy chair of the Vietnam Lighting Association, said the LED lamp market is growing by 35 percent per annum, due to rapid urbanization (27-45 percent by 2020), strong foreign investment in Vietnam, and a boom in the number of commercial offices.

However, Bac said that the LED market is now in chaos with uncontrolled product quality, origin and price. 

About 200 companies have registered their LED products which can be classified into three groups.

The first group includes companies which have modern production lines, R&D centers and standard testing systems. However, they only account for 3 percent of total companies and hold 10-20 percent of market share.

The second group are foreign invested enterprises, 13 percent of the total. They mostly bring products to Vietnam for sale. Their products hold 15-20 percent of market share, while selling prices are two to three times higher than average prices.

The third includes companies which assemble products from imported components, mostly from China, and import companies. At least 84 percent of enterprises are in the third group, which holds 60-70 percent of market share.

Nguyen Doan Thang, deputy chair of the Vietnam Lighting Association, said there are three technology levels in LED production chains.

The first, high technology, includes Wafer and LED chip products. The second, medium technology, is LED packaging technology. The third, low technology, includes  assembling of lighting products.

Bac said developing high technology is out of reach of Vietnam at this time, because this requires a high level of R&D, technology, materials and labor force which Vietnam doesn’t have.

As for medium technology, some Vietnamese companies have set up production lines and separate equipment, but they have not had success. In general, competition in LED packaging market is cutthroat. 

Experts believe that Vietnam should focus on the assembling of lighting products. In the immediate time, enterprises should pay attention to developing Smart Lighting and striving for Smart Home.

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