Innovative Leyard Captures Global High-end Market

By+ZHANG+YIQIN

BETWEEN July 26 and August 3， 2013， Chinas A-share market suffered a downturn. Yet Leyard Optoelectronic Co.， Ltd.， a company focusing on research and sales of LED application products， obtained limit-up five times， which is seen as an amazing feat.

These increases stem from the launch of several new LED products， including the worlds largest 4K Ultra-high Definition （UHD） LED TV， at a size of 288 inches， and an LED display with the smallest pixel pitch – 1.2 mm – a great technological innovation globally.

Compared to LCD or rear-projection TVs， small pixel pitch LED TVs have many advantages： large size， waterproofing， outdoor high-definition display， seamless splicing， and low energy consumption – so its prospects for application are promising.

In the LED sector， low technological thresholds and excessive production capacity have clouded the skies for a long while. As a high-end product， Leyards LED display with the smallest pixel pitch has excited investors.

As a matter of fact， Leyard is not an unknown company. Its products were used for the opening ceremony of the 2008 Beijing Olympic Games， and two of its giant LED screens are standing on Tiananmen Square.

Leyards explorations of foreign markets have also been successful. Its international clients include Expo 2012 Yeosu Korea， the American Broadcasting Corporation （ABC）， Toyota Center（the primary sports arena used by NBAs Houston Rockets）， BMW headquarters， NASDAQ and Citibank headquarters in Hong Kong.

“Our market share of small pixel pitch LED TVs exceeds 90 percent，” says Li Jun， president of Leyard. “Most impor- tant is that Leyard is a Chinese brand， and we own all the patents in core technologies. Every year we invest seven percent of sales revenue in research and development， about four percentage points above the industry average.”

Neither OEM nor Price War

In the 1980s， Li Jun was a young economics lecturer at the Central University of Finance and Economics. In 1988， he discovered a business opportunity with one of the companies participating in an exhibition， and decided to quit his job and become an agent for that companys products. Two years later， he opened his own factory， and in 1995 he created the Leyard brand.

“At that time， the LED industry in the Chinese mainland was not just backward， it was nonexistent，” recalled Li Jun， who was one of the few people to enter the sector， and is still there.

The companys first deal was to pro-duce display screens for securities trading halls. In 1998 it became the largest LED manufacturer in China.

Between 2003 and 2006， Leyard and the renowned Belgian company Barco established the joint venture Beijing Barco Leyard Electric Technology Co.， Ltd. “During three years of cooperation with Barco I was president and learned a lot about business management， commercial sales and quality control. I am grateful for those years，” Li Jun said.

In 2008， Li resigned from Barco Leyard and decided to start his own company， Leyard Optoelectronic. He was clear in mind： neither generate a price war nor become an original equipment manufacturer （OEM）.

“Across the country there are about 2，000 manufacturers of LED products， and production capacity is excessive. Price wars only lead to a constant lowering of the gross rate of profit， in a war without winners.” Thanks to his expertise in economics， Li Jun knew the importance of a trademark. “Without a brand， we cannot get high profits，” Li said.

Independent research and development （R&D） is the only channel for Leyard. With years of experience in the market， Li Jun decided to invest in the development of small pixel pitch LED TVs. This idea contained high risk because of predictions that OLED （organic light emitting diode） could replace LED.

The main reason for Lis faith in LED was size and cost. The OLED can only reach a maximum size of 110 inches， while LED can reach larger sizes. If four 54-inch OLEDs are joined together， costs increase about 100 times. Yet joining four 54-inch LEDs together， costs only increase four times. However， the large investment， lengthy R&D processes and an uncertainty presented huge obstacles for Li Jun.

In order to encourage researchers， Li Jun established a very attractive incentive mechanism： providing researchers stock rights and share options from the company. This measure attracted and retained talented staff in the sector， offering a driving force for development.

Thanks to these efforts， Leyard LED products obtained steady growth in a few years： pixel pitch decreased from 3.0 mm to 2.5 mm， 1.9 mm， then 1.6 mm， and now the smallest is only 1.2 mm.

Li Jun owes this success to the following formula： one clear target + 1，000 experiments + six years of research + three powerful alliances （LED lights from Taiwan Everlight， semiconductor chips from Texas Instruments， and Smart TV technology from Xiaomi）.

Li Jun values intellectual property highly. Leyard owns about 200 patents， which， in his opinion， demonstrates the core competitive power of the company.

Innovation： the Greatest Driving Force

In 2008， Leyard won the bid to provide the Beijing Olympic Games with LED， on the basis of its stable quality and high price-performance ratio.

For the Olympics， Leyard put its products through rigorous testing： immersing them in water for three days to check waterproofness， adopting special designs for their load-bearing capability， so that heavy equipment can move on them safely.

Its participation in the Olympics was an important milestone in Leyards history. The company then acquired a number of LED contracts for major projects， such as the Shanghai World Expo， celebration of the 60th anniversary of the founding of the Peoples Republic of China， CCTVs Spring Festival Gala， the National Games， Beijing Capital International Airports Terminal 3， and the three major railway stations in Beijing.

Leyard， with offices in India， Europe， the U.S. and South America， has launched its global strategy.

Speaking of the future， Li Jun believes that innovation is not just the path for Chinas high-tech companies， but also for the national economy.

“The current transformation is a painful phase for China. On one hand， high costs have reduced the superiority of Chinas labor force over countries like India and others in Southeast Asia and Africa， leading to a decline in competitiveness for labor-intensive industries and the beginning of shifts to other countries. On the other， in the highend market， China is still far below the advanced international level， not only in terms of technology but also quality， due to previous neglect of technological innovation.”

“With many years of probing， weve discovered that， when we move forward in technological innovation and the development of our own products， we have greater competitiveness in many fractionized fields and even in the highend markets of the world，” Li Jun said.“Through years of research and development we have broken the monopoly of foreign products in the LED industry， and even acquired better products. Leyard is the only company that can produce LED TVs with a pixel pitch less than 2 mm.”

Li recalled when a member of BMWs Board of Management noticed the small pixel pitch of Leyards 3D screen， especially its amazing effects， and asked，“Why are we using a Chinese product？”One of their engineers answered， “After a year of research， we are convinced that their small pixel pitch screen has the best quality and effects.”

“We believe that Chinese leaders have realized the strategic importance of innovation and begun to provide support through policies， markets and funds， to strengthen the development of high-tech industry. This is the greatest driving force of Chinas economy，” Li Jun concluded.