Ruifeng Optoelectronics: Focus on packaging main lighting and backlight market

Mr. Gong Weibin, General Manager of Ruifeng Optoelectronics

Product quality has been recognized by international giants

High-tech LED: Recently, Ruifeng Optoelectronics has received 80 million strategic investment. Does Ruifeng have financing needs in the near future? What kind of capacity will this investment be used to increase?

Gong Weibin: Ruifeng's operation and capital situation in the past two years is very good. According to the company's previous annual growth rate of 50%, our desire for financing is not strong. Many venture capital investors have been looking for us, but Ruifeng has always insisted on only accepting strategic investment. At present, the LED industry is very hot. Ruifeng has accumulated through ten years, and when it comes to qualitative change, this strategic investment is of great significance, which means that Ruifeng should start to make a real effort. We will embark on a path of rapid development in the next two years. The investment, from the LED TV industry, Ruifeng will make full use of the rapid growth of the LED TV market for upstream and downstream integration. This investment will be used to increase production capacity in LED backlight devices and lighting devices.

Gaogong LED: Why do you think strategic investors choose Ruifeng?

Gong Weibin: This question is best for investors to answer. I personally think that Ruifeng has a solid foundation and potential. I can proudly say that Ruifeng's technology, R&D, process and quality control capabilities are absolutely leading in China.

In fact, AVAGO, the world's fourth-largest LED company, chose Ruifeng as their OED and OEM partner for SMD LEDs in China two years ago. Many internationally renowned brands have recently visited Ruifeng because of their frequent visits. Ruifeng's reputation in the international market has begun to put pressure on some international first-line LED companies.

Of course, our excellent management team is also the core competitiveness of the company. I think this is the reason why Ruifeng is chosen.

Gaogong LED: Just now you mentioned An Huagao, what impact does the company's cooperation with Ruifeng have on you?

Gong Weibin: Anwarao has a great help to Ruifeng.
The first is that our quality requirements are very high. Taking the wire bonding process as an example, it is generally required to test the tensile force of the wire, but the number of inspection items required by Avago is more than a dozen items, such as the size, thickness, thrust, tension and curvature of the gold wire, and all are machine inspection. The parameters of each machine should be set according to their requirements. In our opinion, there are some functions that are available and not available, but AVAGO is regarded as the core. In short, the cooperation with Anwarao has greatly promoted the technological progress of Ruifeng. Now many foreign customers are calling for Ruifeng's things, and there are foreign end customers asking for Ruifeng's certificate of origin. This all reflects the problem on the side.
There are also some ideas, AVAGO is a company that does not accept any excuses. For example, delivery, one day earlier, one day in the eyes of the customer is a breach of contract, we must find a way to complete. This kind of culture will help Ruifeng's future cooperation with big companies.

High-tech LED: What conditions do you think the LED companies in the future should have? Is there such a leading company already in China?

Gong Weibin: I personally believe that the future LED leading enterprises should have the following three conditions: First, there are LED TVs or LED backlight products as the final market brand enterprises. At present, such enterprises include Konka, Skyworth, Hisense, TCL, etc.; The second is the enterprise with LED lighting layout at the same time, because from the perspective of LED discreteness, lighting and backlight are a good complement; third is a semiconductor-based enterprise. Companies with such capabilities in the international are Samsung, Toshiba and Panasonic, and companies that have these three conditions at the same time have not yet. However, the most promising country to become a leading company is the LED TV company, which is the starting point for Ruifeng to choose a strategic partner.

Focus on packaging and not rushing with customers

High-tech LED: National Star, Jiuzhou, Hongli and other domestic packaging manufacturers are expanding upstream and downstream, and Ruifeng has been focusing on packaging, what kind of strategic considerations do you have?

Gong Weibin: I appreciate Vanke's philosophy: because of concentration, it is strong. Anything, even the simplest thing, is really easy to do. In some people's eyes, LED packaging is a very simple matter, but everyone thinks that most of the domestic LED packaging companies are tens of millions of scales, and there is no entry, just thinking about doing upstream applications, what to do. . That is really sad! Taiwan's LED packaging listed companies have more than 10, with an average annual sales of about 1 billion yuan. In such a large market in China, pure LED packaging should be able to appear in the company of about 2 billion. I think Ruifeng is focused on packaging, and there is a certain truth. As for the integration of upstream and downstream, I think it is still done by the final brand and channel, not the other way around.

I always think that it is not easy for professional people to do professional things and do one thing professionally. If you have a large enough team, you can still go upstream and downstream, but there will be business with customers, this is the industry's taboo. A company's business exports should be one type, both upstream and downstream, and at the same time external, strategically difficult and illogical.

Gaogong LED: What are the main gaps between mainland China and Taiwan and Japan packaging factories (such as Yiguang and Nichia)? What is the gap between Ruifeng and them?

Gong Weibin: I personally feel that the technical gap is mainly in the material ability. Nichia is a domestic chemical company. This is the essential gap. Its basic materials are developed by itself. Ruifeng or Taiwan Everlight does not have this ability.

Of course, Ruifeng can't develop new materials, but we have spent a lot of energy and research on the properties of basic materials. This may be the most essential difference between Ruifeng and general packaging companies. Our R&D positioning is based on materials.

Our pinnacle is SMD ceramic packaging, which is the future trend. Now that the newly launched products of Osram and Lumileds are all ceramic encapsulation, Ruifeng has been at the forefront in China. We have applied for patents in this area since 2004. Nowadays, some people in the industry think that the package is too simple. In fact, it is not easy to do it. For example, Osram, which is able to truly enter the automotive electronics and automotive instrumentation, also supplies some goods to Hyundai.

High-tech LED: In the face of the gap, how do you think China should develop its own packaging industry?

Gong Weibin: LED TV and LED lighting are a good opportunity, but they are also played by big companies, and the risks are great. Domestic appliances, steel, real estate, and medicine are all involved. In fact, there are great hidden dangers. The key is to do the basics well. It is one thing to do the finished product, the enterprise and the human being. The short-term benefits are sometimes contrary to the long-term interests.

Domestic packaging companies should be divided into two modes. One is to focus on LED backlighting and lighting, and should introduce international talents. Taiwan and the United States have many outstanding talents. Intensify efforts in research and development, and strive to take the initiative in the international competition.

The other is a general packaging company in China. When domestic and foreign giants gather their eyes on lighting, they should do the basic work well and concentrate on the markets that they ignore, such as display, indication, and auxiliary lighting.

For the packaging enterprises that have been positioned at the low-end and mid-end, the LED market has a huge breadth and a great opportunity. But don't move the practice of doing low-end market to the industrial supporting field.

High-tech LED: According to our survey, only 11% of the LED investment in 2009 has been invested in the packaging industry. In the “Opinions on the Development of Semiconductor Lighting Energy-Saving Industry” recently issued by the National Development and Reform Commission, the package is not within the key support areas. What do you think?

Gong Weibin: First of all, the government has focused on LED lighting as a key point. Applications, packaging, and chips are all part of it. With this attitude, companies will be more confident. Applying the words of Premier Wen is that confidence is more important than gold.
From the national level, the chip is the core technology, and the state's key support for the core technology is correct. But I personally think that without the lab, there is no high technology. Now that China has so many chips, there is really no basic technology for extension. Everyone is trying to find a way to make a concept and make money. Now everyone is going to do the chip, and in the end, there are not many that can survive. Just like the semiconductors and LCDs in the past two years, the country has invested a lot of money, and finally it may not be worth the money.

The more upstream it is, the more technical and capital-intensive it is. If there is no technology to support it, the money invested will be drowning. Now China has a bad phenomenon that is speculation and short-sightedness.
I personally think that there will be one or two LED packaging companies in the shortest time in China, so as to compete with Yiguang. The important thing for a company is to establish its own core competence. As for government support, it is an external cause.

Optimistic about the backlight and lighting market

High-tech LED: For Ruifeng, it is now doing backlight, lighting, display, instructions and so on. Which area do you think will be the focus of development in the future?

Gong Weibin: First of all, the characteristic of LED is its "wide". Any business that wants to be big must understand this. From the perspective of industrial development trends, the two major priorities in the future are backlighting and lighting. And I think that to make the company bigger, it must be done by LED TV and LED lighting, not just one of them. Such as Toshiba and Matsushita are combined in such a way, domestic companies have no such foundation and ability.

High-tech LED: From a technical point of view, what are the characteristics of backlight and lighting?

Gong Weibin: LED lighting has higher power and higher requirements for heat dissipation and light decay. In terms of backlighting, it is mainly for consistency requirements. LED TVs are different, and color and reliability are the key points. Consumers choose LED TV mainly because of its color expression. There is a lot of articles in it. At the same time, for LED TV, one LED is broken, and the whole TV is darkened. This is a difficult for many domestic companies.

High-tech LED: How is Ruifeng's technology in RGB LED backlighting progressing?

Gong Weibin: The RGB LED TV has not been done yet. The domestic technical capabilities have not yet reached this requirement. Now it is done with phosphor technology. Ruifeng also jointly developed RGB LED solutions with other companies two years ago, but did not promote it. The main problem is that the cost is too high, domestic demand is low, and there are some technical matching problems. Before Japan, there were many companies doing RGB LEDs, such as Sony, Sharp, etc., but because the cost was too high and not promoted, it was later surpassed by Samsung.

High-tech LED: We found in the process of visiting the industry that many display packaging companies are now using domestic chips, and where is Ruifeng mainly used?

Gong Weibin: We mainly use domestically produced display chips. In terms of low power, the gap between domestic and foreign reliability is not big. Domestic chips like Shilan and Huacan can be used. In terms of backlighting and lighting, we mainly use chips made in Taiwan. There are not many domestic high-power products, and there are problems in the supply capacity.

Our reporter: Zeng Cong Zeng Hongping