“The problem of debt chain has been severe in the past six months,” said Liu Xiao, general manager of Intematix (Shenzhen) which, as one of the main phosphor suppliers in domestic LED industry, has also found debt chain a headache.

On the 2^nd G20-LED Summit happening on December 14^th 2012, Liu Xiao poured out his own bitterness, “Recent condition is troubling me. In the past, payment came before shipment. Now, possibly based on numerous suppliers, it is common to get supply without paying but then looking for other suppliers. ”

According to GLII, up to the end of the third quarter of 2012, 21 listed companies with LED as their main business have 5.519 billion yuan in outstanding accounts receivable and 3.483 billion yuan in outstanding accounts payable. The total accounts receivable accounted for 89.13% of the total revenues in the first three quarters of aforementioned companies.

A hard time represents an opportunity for M&C in LED industry. This round of reorganizing will be led by restructuring among companies in up and midstream and the accelerated penetration of upstream companies into downstream. Major downstream companies will also take this chance to set foot in LED industry or compensate their own disadvantages.