Companies in LED Industry Benefit from Upcoming Chinese Ban on Incandescents
Nov 7, 2011 With the onset of China's ban on incandescent bulbs to begin in less than a year, companies offering energy-efficient replacements, including LEDs, have started seeing the positive effects in their businesses.
Starting in October 2012, incandescent bulbs that use 100 or more watts of power are banned in China. Eventually this ban will also apply to bulbs using more than 60 watts in 2014 and the same for 15 watts in 2016.
Cree Inc., a leading producer of energy-efficient LEDs, has already gained 9.7 percent to $30.57 in New York, which is the greatest change since August 10. SemiLEDs Corp, another LED-manufacturer, had stocks drastically increase by 31 percent and Veeco Instruments inc., a manufacturer of equipment for production of LEDs, had a 10 percent increase according to Bloomberg.
History shows Cree made 36 percent of its sales in Hong Kong and China last year, while "its market share in the world's most populous country may be as high as 80 percent," according to Piper Jaffray & Co. Cree's advanced LED technology in relation to that of manufacturers in China accounts in part for the company's 'limited competition'. Most of its technology is two or three years ahead, which leaves the company to benefit from the surge in use of LEDs expected after the ban on incandescents. China may also further the lighting switch by offering subsidies to promote LED use.
Author: Rebecca Milne
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