In 2014, there is a consensus in the LED industry that is most deeply rooted in people's minds. This year is the first year of LED lighting! This sentence. According to industry research center data, the global traditional lighting market is about 800 billion yuan, and the penetration rate of LED lighting in 2013 is only close to 20, and the LED penetration rate will increase to 50 in the next three years. By 2016, the LED lighting market scale or It has reached 500 billion yuan. Under such a good situation, we have recently observed that many LED listed companies are frequently reduced by shareholders, what kind of logic is behind them? Since the beginning of 2014, the A-share LED sector has increased by 20. In particular, since the middle of July, the rebound of the LED sector has exceeded 20, and the huge increase in the short-term will inevitably increase the pressure on some shareholders to cash out. However, the frequent reduction of controlling shareholders and institutional investors is difficult to be seen as a short-term speculation. The industry research center believes that it may indicate a deeper operational reason. First, the rapid growth of the LED lighting market does not mean that competition within the industry is weakening. On the contrary, the LED lighting market is destined to be a Red Sea market from the beginning, and competition in the industry will become increasingly fierce. After several years of rapid growth and several years of industry winter, the LED industry has entered a relatively mature stage of development. In the current industry boom, it is difficult to see the situation of chickens and dogs ascending to the sky, as in the past, but the situation in which the strong are hegemony and the weak are out. In fact, in the case of such fierce competition in the industry, the profit margin of the industry will be difficult to open, and the increase in revenue will be the new normal for LED companies. Secondly, LED companies face the entry of traditional lighting companies and have no competitive advantage. After many years of development, the manufacturing process of LED lighting products is very standardized and streamlined. The threshold for traditional lighting companies to enter LEDs has become very low. Traditional lighting companies have a strong competitive advantage by controlling sales channels. Finally, LED lighting sources replace traditional lighting at speed, and market space is saturated or too fast. The traditional lighting market itself is a slowly growing market. LED lighting is only an alternative to the traditional lighting market and contributes little to incremental space. After the outbreak of LED lighting, or the completion of the entire replacement process in three or five years, coupled with the long life of the LED light source, the market for the future lighting market to replace the market space is smaller, LED lighting companies may face a shrinking market. Of course, big waves and sand, we believe that in the process of LED lighting market, there will be a number of outstanding LED companies in China to grow up and become the new upstart in the lighting industry. However, we cannot ignore the risk that a large number of LED companies will die.