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LED stage competition appeared inflection point, the upstream monopoly pattern basic formation

- Sep 18, 2016 -

An upstream raw materials, labor costs, because the downstream part of the subdivided market supply and demand imbalance caused by factors such as chip, package prices, bring market quotation for the LED in the future direction of the infinite daydream.


In addition, as the incandescent light bulb out, people's requirement for the quality of the product promotion, poor quality low price competition become a thing of the past times, product price and benign competition in the market continued.


As the second largest chip maker, in the domestic HuaCan photoelectric ShiSongGang marketing director said, "on the one hand, enterprise competition is tend to be rational, cost rationalization gradually; on the other hand the downstream LED display screen needs small spacing, growing sales. These factors together, promote the recovery of the LED market."


HuaCan photoelectric also actively expanding production increase in this year, a total investment of 6 billion yuan of LED epitaxy, the chip and the sapphire projects have been started. In addition to blue SPAR technology acquisition, also ensure subsequent competitiveness from the view of supply chain integration.


Indeed, in the first half of the LED chip market demand continues to grow, the valspar rising steadily, for HuaCan photoelectric to further consolidate the advantage position in the market. Especially benefit from small spacing display market demand rapid growth, HuaCan photoelectric display niche products in both production and marketing of the gratifying situation.

Half annals, according to data HuaCan photoelectric in the first half net profit of 53.1716 million yuan, up 323.02% from a year earlier. Net profit growth is the cause of chip products after falling in the fourth quarter of 2015, relative to the fourth quarter of last year and in the second quarter of this year in the first quarter of this year, prices have rebounded.


This round of chip price boom, is undoubtedly the upper stage competition turning point. The whole upper pattern basic formation, then what other factors may cause the changing new competition in the future for a period of time?

"Chip + packaging is a" in the domestic feasible?


For a long time, the Chinese mainland and Taiwan LED chip and packaging division of labor is relatively clear, Japanese, Korean, European and American multinational companies are basically belongs to the operation mode of the chip + packaging. So, the future new technology mature gradually, such as CSP chip and encapsulation of the division of labor pattern will be broken?


ShiSongGang think, after all, China and foreign market background different, chips and packaging industry the development of Europe and the United States, China and South Korea both research and development, technology, or industry development stage, the future is unlikely to go completely encapsulated and chip integration, chips and encapsulation still need effective integration and cooperation, believe that will come out a route with Chinese characteristics.

The increase of concentration of market, oligopoly structure forms


Enterprises are numerous, small scale, technical level is uneven, the lack of leading enterprises, it had always been pain points of the development of the LED industry in China, now the situation is improved step by step.


At present, the entire LED industry chain has been formally enter the competition period.


In the upstream of the LED chip area, three Ann photoelectric, HuaCan photoelectric, dry as photoelectric in continues to expand market share, industry concentration has been increased.


With the highly concentrated chips in the market, oligopoly pattern emerging. ShiSongGang thinks, "compared to last year, this year the chip market is more and more concentrated, the formation of large Evergrande, the strong stronger pattern, therefore, to large scale advantage will become too obvious.


Upstream of the future core technology, scale, capital, cost control, the next competition will look at these small and medium-sized chip companies can persist, to some enterprises in the first half of next year will be eliminated.

At the same time, and constantly explore new growth point for technology research and development and the market of new products layout, also will become the upstream enterprises "survival weapon".


Since entering this year, the downstream application market diversification trend more and more obvious, HuaCan photoelectric to further consolidate and strengthen the company's core competitiveness, continues to increase investment in product research and development, constantly improve product performance.


In addition to display screen and LED lighting as the main force, HuaCan photoelectric to diversified products layout, as the company's new profit growth point.


"The red light in reverse polarity LED chip, flip the LED chip, power RGB chips, yellow green highlight LED most of the projects have been production quantity, will continue to enrich product categories, expand the product market, improve the comprehensive competitiveness of the company." ShiSongGang tell leds.


Industry consolidation period, chip merger between enterprises is not a wise one?

Many insiders said, after 2015 years in the industry, after the "shuffle" LED chip, packaging prices began to rebound, given the price wars and disorderly competition become a thing of the past, this round of price rebound is expected to last and extend to the terminal product areas.


More importantly, due to improve production efficiency and increased competition, domestic LED chip prices have fallen sharply, which made many small LED chip plant into a "zombie" companies. For the domestic several chip leading enterprises, whether the next step will be to integrate these small and medium-sized enterprises (smes)?


Compared to mergers and acquisitions between chip counterparts, HuaCan photoelectric seems to be more bullish on resource integration based on industry chain upstream and downstream. "For the LED chip companies themselves, chip counterparts between merger integration is difficult to go through, because it involves a lot of problem such as equipment, technology, cost, need a calm analysis enterprise." ShiSongGang said.


HuaCan photoelectric, in fact, the first half of this year and also the key customer signed a strategic cooperation agreement, with the existing production base of continuous expansion, the factory in yiwu to further consolidate its position in the industry. HuaCan photoelectric yiwu for the construction of factory is now in the key period, early next year is expected to enter the development stage. After the completion of the expansion will have LED epitaxy chip 1.3 million/month; The scale of production of sapphire substrate 1.6 million pieces/month.


But out of the LED industry, is another scenery.


HuaCan photoelectric target in the first half of the new semiconductor is based on "LED and MEMS have many similarities to the" technology positioning: in addition to similar to the gm and on some of the production equipment, the beautiful new advantages in the field of consumer electronics and automobile electronics helps HuaCan photoelectric growth, while HuaCan photoelectric helps the development and new customers.



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