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Although a number of LED chip companies said in an interview with reporters that they have not received any news about the subsidies, but as a large government subsidy for many years, many companies have already fought. Industry insiders said that if the government subsidies are abolished, the LED chip industry will usher in a more brutal reshuffle.
State Department cleanup tax <br> <br> Previously, LED chip industry has been large government subsidies, subsidies to promote the productivity spurt of development, but also led to the emergence of various problems.
According to statistics from the High-tech LED Industry Research Institute, the number of MOCVD equipment for epitaxial wafer production in China was 327 in 2010, but it reached 1,017 in 2013. If the old machine is removed, the actual addition in 2013 will be added. The number of MOCVDs exceeds 130 units.
In fact, the call to cancel the subsidy for LED chips has already existed. Many industry insiders believe that the LED subsidy policy has promoted false prosperity and led to a serious excess of production capacity. In September this year, an industry insider said at the forum that from the perspective of government departments, it is not necessary to provide various subsidies, but to increase market supervision.
The elimination of subsidies allowed LED companies to walk independently and became a consensus within the industry. In March last year, Shenzhen suddenly abolished the LED industry plan, which was interpreted by the outside world as a return to rational performance of the LED subsidy policy. However, there is no specific news on how the State Council will tighten LED policy subsidies. Enterprises and some experts also indicated that they have not received relevant documents.
"We have not received any official documents to cancel subsidies and tax incentives." Wang Qing, director of Sanan Optoelectronics, said, "We also heard a lot of rumors that the government wants to cancel the subsidy policy for LED chip companies. According to our Understand that the rumors should be inferred from the media’s notice of clearing the tax incentives issued by the State Council not long ago.†An insider said that he has not heard any news about canceling the LED subsidy.
However, the above-mentioned "Notice" requires: "Without the approval of the State Council, all regions and departments shall not stipulate fiscal preferential policies for enterprises. The establishment of violations of laws and regulations is linked to the payment of tax or non-tax revenue by enterprises and their investors (or managers). Preferential policies for fiscal expenditures, including levy and return, collection and payment, financial incentives or subsidies, and reduction or exemption of land transfer income in the form of payment or subsidy, etc., are resolutely cancelled."
That is to say, local governments attract LED chip companies to settle in investment, and subsidies with finance must be approved by the State Council, and the approval methods have been significantly tightened. Foshan lighting people said that many subsidies and concessions were local-led, and now it is subject to the approval of the State Council, indicating that the tightening of subsidy policies has become the trend of the times. In the future, enterprises must survive on their own, and they must rely on their own competitiveness.
LED companies suffered from a series of subsidies and tax incentives subsidy dependency syndrome <br> <br> introduced by the Government, it had been intended to support the development of new industries, but reporters noted that huge subsidies from the government but accounted for a performance of listed companies Dabile, even became a fig leaf for the company's poor performance.
As the leader of the LED chip industry, Sanan Optoelectronics (600703, SH) received a lot of government subsidies. The data shows that Sanan Optoelectronics' net profit for 2013 was 1.036 billion yuan, and government subsidies totaled 458 million yuan. Among them, MOCVD equipment subsidies amounted to 141 million yuan. In the first half of 2014, the net profit was 666 million yuan, the government subsidy received was 196 million yuan, accounting for 29.4%, and the MOCVD equipment subsidy amounted to 77.25 million yuan.
It is understood that the current production capacity of the LED chip industry has been seriously oversupplied. The general view in the industry is that there will be only three to five chip manufacturers in the next few years. At present, many companies still rely on government financial subsidies to maintain operations. If the policy of canceling subsidies comes ahead of time, will the chip industry accelerate the reshuffle?
“The subsidized LED companies are steadily decreasing. If the subsidies are removed, the long-term development of the industry, especially the leading companies, is a good thing. Cancellation of subsidies can regulate the competitive landscape of the industry, avoid disorderly competition, and strengthen the industry. Concentration." Sanqing Optoelectronics Board Secretary Wang Qing told reporters.
Ding Jianhua, executive deputy general manager of Zhejiang Hehui Lighting Technology Co., Ltd. pointed out that subsidies in the LED industry will gradually decrease in the future. In his view, many of the subsidies in the LED industry are not spent on basic technology research and development, but on blindly expanding the scale and purchasing equipment.
"Before manufacturers have poured into this industry, the government's high subsidies are very important reasons. If the subsidies are abolished, the arrogance of the entire industry will decline, which is not a good thing for the development of the industry." Ding Jianhua said.
Zhang Hongbiao, director of research for high-tech LED industry, believes that "if the subsidy is abolished, the impact on the financial statements of listed companies will be great, but it will not affect the survival of the company. But it is a fatal blow to small and medium-sized chip manufacturers who rely on government subsidies. The industry will accelerate the reshuffle." 
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The State Council will tighten the tax and other preferential LED subsidies will be "returned to the original shape"
"Wolf" may really come. On December 19, the “Notice of the State Council on Clearing and Regulating Preferential Taxes and Other Preferential Policies†(hereinafter referred to as the “Noticeâ€) was issued. The “Notice†requires comprehensive clean-up of various types of taxation and other concessions, “through special clean-up, violation of national laws. The preferential policies of the regulations will be suspended and the documents will be abolished."