Illuminated bankruptcy: The great escape and dual-carbon breakthrough battle in China's LED industry

1.Collapse of low-end production capacity: a belated industry shakeout

The list of bankruptcies in the lighting industry in 2025 keeps growing: Foshan Weiao Lighting, after ten years of operation, suddenly shut down; Jiangmen Shengliang Lighting ran away with customers' money; Zhongshun Semiconductor Lighting, a national high-tech enterprise, suspended production for all employees... Judicial data shows that from January to May this year, over 60 lighting enterprises nationwide entered bankruptcy proceedings, a surge of 40% year-on-year. In the bankruptcy announcements of Foshan courts, the frequency of "overdue accounts receivable" appeared as high as 79%.

 The problem lies directly in the low-end manufacturing model:

OEM/ODM dependence: Chinese LED lighting enterprises have long been huddled at the bottom of the value chain, providing OEM/ODM services to European and American brands (such as Signify and OSRAM). Although their export sales account for 75.4% of the global market, their profits are meager. A set of LED downlights sold to Europe has an FOB price of only $2-3, while the retail price for the same product in European and American markets reaches $20-30.

Technological Hollowing-out Dilemma: Low-end home lighting is deeply entangled in price wars, with gross profit margins compressed to below 8%. Meanwhile, in high value-added fields such as industrial lighting and automotive lighting, due to technical barriers such as heat dissipation design and optical light distribution, the penetration rate of domestic enterprises is less than 40%.

Capital chain vulnerability: The scissors gap between the 180-day payment terms for overseas customers and the 30-day payment terms for domestic suppliers, coupled with overdue accounts receivable, has become the last straw that breaks the back of small and medium-sized enterprises.

2. Dual-carbon strategy: Policy spotlight shining towards the summit

As low-end production capacity faces widespread distress, the "dual carbon" goals are opening up new opportunities for the industry. National policies have paved three golden tracks for the LED industry:

①   Industrial energy-saving replacement: a multi-billion-yuan rigid demand market

Strong policy drive: The "Implementation Plan for Carbon Peaking in Urban and Rural Construction" clearly requires that by the end of 2030, the use of LED high-efficiency energy-saving lamps should account for more than 80%. The process of eliminating high-energy-consumption light sources such as metal halide lamps and high-pressure sodium lamps in the industrial sector is accelerating. In China alone, the annual electricity consumption for industrial lighting is expected to reach 300 billion kWh. If LEDs are fully replaced, the annual electricity savings would be equivalent to 1.5 times the output of the Three Gorges Hydropower     Station.

②   Smart city infrastructure: The green revolution in lamp posts

From June to July 2025, over 5 billion yuan worth of lighting engineering projects were released nationwide, with smart lamp posts becoming the core carriers:

Suzhou High-tech Zone Project: Invest 500 million yuan to build 3,240 sets of smart lamp posts, integrating functions such as charging piles and environmental monitoring;

Renovation of Neijiang urban area: invested 16 million yuan to promote energy-saving and carbon reduction updates of lighting facilities.

These projects respond to the requirements of "developing green lighting and promoting smart lamp posts" outlined in the "14th Five-Year Plan for National Urban Infrastructure Construction". They reduce energy consumption by 60% through a photovoltaic integration solution, and achieve an additional 30% energy saving through intelligent dimming.

③Circular economy: A green transition from products to materials

Material Revolution: Ledvance, a subsidiary of Mulin Sen, uses post-consumer recycled plastic (PCR) to manufacture LED bulbs, reducing carbon footprint by 30%, improving luminous efficiency by 15%, and reducing plastic use by 500 tons annually.

Innovative Model: Signify introduces "Lighting as a Service", utilizing 3D printed luminaires to reduce carbon emissions by 47% and lower maintenance costs by 60%.

3.Portrait of the game-changers: The rise of the technology school and the scenario school

 In the transitional period of industrial transformation, where ice and fire intertwine, a group of enterprises are tearing open cracks:

A.Technical breakthrough faction: Persistently striving for excellence in industrial and automotive-grade standards

Breakthrough in Industrial Lighting: Companies such as Lidexin and Lianyu have collaborated with international brands to develop explosion-proof mining lights, achieving a breakthrough in technology with a lifespan of 100,000 hours, seizing the global market for stock replacement in industrial lighting.

Automotive-grade positioning: With the penetration rate of new energy vehicles exceeding 30%, LED headlights have been upgraded from safety components to intelligent interactive components. Changzhou enterprises have developed DLP projection headlights for the NIO ET9, with a single set priced at over 10,000 yuan. By binding with car companies to share patent pools, they avoid technological blockades.

B.Scenario solution approach: From selling lighting fixtures to selling a complete lighting environment

Empowering the night economy: NVC Lighting has created a dynamic lighting environment in the Jiefangbei business district of Chongqing, extending the consumption period to 2 a.m. and driving a 40% increase in consumption per unit area. Its "cultural narrative lighting system" provides lighting and shadow operation services for Xi'an Tang Dynasty Everbright City, resulting in a 50% increase in average transaction value per customer.

Healthy Light Formula: Opple Lighting has developed an "Emotional Light Formula" system, which extends consumer stay time by 15% and boosts purchase conversion rate by 9% through adjusting color temperature spectrum.

4.Policy leverage: How to penetrate the last mile?

Despite a clear direction, industrial upgrading still faces three obstacles:

Standard lag: The current "Standard for Lighting Design of Urban Roads" (CJJ 45-2015) has an energy efficiency limit that is only 90% of the new national standard entry level, resulting in higher design power and severe waste of electric energy in engineering projects.

Financing bottleneck: Small and medium-sized enterprises (SMEs) rely on green finance for technological research and development, but tools such as pledges of carbon emission reduction rights have not yet been widely adopted.

Absence of a recycling system: The recycling rate of LED products is less than 20%, and the risk of mercury pollution remains unresolved.

To break the deadlock, we need to launch three arrows simultaneously:

Standard iteration: Accelerate the revision of the "LED Industrial Lighting Energy-saving Technical Specifications" and link the luminous power density (LPD) of road lighting to the latest energy efficiency rating.

Technical breakthrough fund: Establish a special fund to overcome "bottleneck" issues, such as automotive-grade LED driver chips and high color rendering index plant lighting sources.

Circular economy legislation: Mandate the implementation of the extended producer responsibility system and establish carbon footprint management for the entire life cycle of LED products.

Conclusion: Between the Extinguishing of Lights and the Turning on of Lights

As the tide of low-end manufacturing recedes, China's lighting industry stands at a crossroads of value reconstruction. The "dual carbon" strategy is not an option, but a license for survival - the EU Carbon Border Adjustment Mechanism (CBAM) has incorporated product carbon footprint into trade barriers. Enterprises without optical design capabilities will eventually be shut out of the multi-billion-yuan industrial lighting market.