What the news does represent, according to the analyst, is the next logical step for China in its LED strategy. Abrams noted that the Chinese government has financed the equipment side (Veeco and Aixtron's side) of the market to create Chinese LED producers to the point where there are now too many producers, so the next thing to do is take those incentives away, and in their place, create a demand incentive to fill the capacity. "That's what they've always said they would do," Abrams said. In fact, the main China LED headline -- and Wall Street fear -- during the past year has been the pace at which China would end the LED equipment subsidies.