Outbreak Of LED Chip Prices Rebound, Accurate Capacity Expansion
- Sep 10, 2016 -
LED chip prices rebounded, intense reshuffle after the improvement of relations between supply and demand
Companies generally appear 5-10% price increase. Global LED photoelectric chip giant Taiwan wafer in May this year was more than 15% for some products to raise prices. Domestic leading LED chip three Ann photoelectric also sent a letter on August 25 in view of the small and medium size product prices to rise by 10%. Downstream packaging field, the absolute leading domestic wood Tomlinson also plans on September 1, an increase in the price of display RGB lights, 5%, and also, cinda photoelectric also at the same time, an increase in the price of RGB lights, 5%. In addition to the above, these companies also rise in price of LED industry chain related companies has HuaCan photoelectric, the starlight, AnPuGuang, TRW photoelectric and so on. Industry generally rise in price.
After intense shuffling supply-side obvious shrinkage:
1. The early stage of the extensive expansion lead to overcapacity, price war sparked intense reshuffle, backward production capacity.
LED industry due to the policy a few years ago and subsidized capacity expanding rapidly. According to GLII statistics show that in 2009-2014, the domestic LED epitaxy chip MOCVD equipment grown from 130 to 130, growth in super 8 times. During the 1000 sets of new MOCVD most got place for each 8 million yuan to 10 million yuan of subsidies. Extensive expansion, leading to excess production capacity, triggering fierce price war. 2013-2015 to replace 60 w incandescent lamp LED bulbs average decline reached 30.7%, 23.4% and 23.4% respectively, instead of 40 w incandescent lamp LED bulbs average decline reached 19.3%, 17.9% and 17.9%, respectively. The chip market is more competitive, chip prices dropped by almost 30% in 2015, and 2016 1 quarter still continue downward trend. After a few years, especially after the price war 2015, the domestic many smaller and low profitability of companies transition or reduce capacity.
2. Subsidies canceled, new equipment investment is larger, the new capacity.
In subsidies in 2015, after the new production line of the machine into become very big, the price of single MOCVD amounted to 20 million yuan, many enterprises are not able to bear. According to the global MOCVD leading manufacturer Aixtron and Veeco (two companies accounted for more than 90% of the world share) only about 30 orders at present so far this year, compared to 2015 and 2014, the world's 2015, 228 units of MOCVD shipments, new capacity.
Display and lighting industry booming, downstream demand side is still strong:
1. LED display related company performance is good, the sustained high growth
Global LED display the size of the market in 2015 reached 2015 yuan. With China market reached 32 billion yuan, 23% growth in 2014 compared to the same month. And according to the OFweek industry center is expected that by 2020, the domestic market will be more than 80 billion yuan, an average annual compound growth rate of 20.1% for five years.
Among them, the LED display in recent years, the meteoric rise of the small spacing together since it has no seams, display effect is good, the cost is falling fast, long life and other advantages, has gradually replace DLP screen splicing display, etc. Related small spacing according to enterprise growth performance significantly. Based on LEDinside data, in the first half of 2016, Abby's small spacing display implement written about 230 million yuan, an increase of about 65%. Chau Ming technology product revenue grew 64%, small spacing orders rose by 77%. Leah, small spacing hd display order to soar, has exceeded 1.1 billion yuan, rose more than 100%.
LEDinside estimates, 2016 small spacing LED will reach 29 billion, the number of consumption as the encapsulation material gradually implement localization, cost down further, and small spacing LED display the permeability of ascension. Is expected to reach 189.8 billion by 2021 its consumption, the compound annual growth rate as high as 46%. Output is expected to grow from $2016 in 300 million to $2021 in 800 million, the compound annual growth rate of 21%.
Only 3 to 2. LED lighting permeability, the space is still large
Downstream of the LED lighting is the main application market, according to the first LED net data, roughly accounted for about 69%. According to DIGITIMES data, the global LED lighting market scale has grown significantly in recent years, from $2009 in 1.75 billion, grew to $2015 in 29.9 billion, during the compound annual growth rate of 60.5%. But its permeability is still not high, only 27.2% in 2015. Therefore, its growth space is still huge.
And in the near future, according to China's national development and reform commission (NDRC) and five ministries released in November 2011, "China to phase out incandescent light bulb roadmap, eliminated the implement of incandescent lamp at the end of the pilot is on September 30, 2016, October 1, will ban the import and sales of more than 15 watts and general lighting incandescent lamp. In the important time points near and energy-saving lamps popularity of incandescent lamp out the case for many years, our country city lighting or will usher in a wave of replacement LED the boom.
Benefit from the global to phase out incandescent light bulb and LED lighting products prices falling, the global LED lighting is expected from about 30% to further enhance the permeability. China as the world's 80% yield of LED lighting products production base, the future is expected to benefit from the LED lighting permeability increase significantly.
The LED industry concentration will continue to improve, will significantly benefit from good company
Since 2015 industry mergers and acquisitions are apparent. According to incomplete statistics, Aladdin news center in China in 2015 LED industry merger integration, 1 November 2015, the Chinese LED industry mergers and acquisitions amount to 40.8 billion yuan, with 53 cases. One big acquisition case, m&a case number $39, accounting for more than 73.6%. Also have 6 its cross-border m&a, mergers and acquisitions amount is 22.8 billion yuan, accounted for 55.9%. This year, m&a is still hot, a lot of LED lighting companies began to horizontal or vertical mergers and acquisitions, many enterprises will be beyond the realm of money to the LED such as Internet, media, sports and other transformation development. At the same time, overseas industrial chain integration of m&a is not in the minority, such as HuaCan photoelectric subscribe South Korea co., LTD SemiconLight, leah's acquisition of flat of electronics, three americans photoelectric merge America MFLX huanyu communication semiconductor, dongshan precision fitting m&a and so on. The overall industry mergers and acquisitions, industry concentration is expected to promote quickly in the future.
Top industry occupied the main market, the scale effect of strong profitability is expected to remain strong constant strong momentum. Chip manufacturers, for example, according to the first LED network data, the top five chip manufacturers domestic city has reached to 67% share in 2014, and is expected to reach 71% in 2015. Its top is expected to pass the scale effect of manufacturers, keep the stronger profitability. And the price, for large manufacturers, can be split by the amount of purchase chips price gap, but small businesses don't have the strength to accept the price increases in the cost of production. Whole, chip area is expected to continue strong, stronger, industry concentration is expected to further enhance.
Company strong profitability in the LED chip was proved that the second phase of production precision on the follow-up is expected to benefit the industry to improve quickly
High cost control ability was proved, is the company's core competitiveness. Australia the shun cheong "internal corporations" management system innovation ability, good cost control has been obtained in the field of metal logistics distribution and the LED chip. Metal logistics distribution under the condition of the industry as a whole confined, gross margin can still maintain sustained growth, net interest rates once 2 times more than competitors (industry about 1-2% on average, about 5-6%). LED chip in 2015 also won a 33.1% gross margin, after leading three photoelectric Ann. In the first half of 2016 due to the drag in the first quarter, second quarter, although there are 15-20% gross margin, but LED the overall gross margin of 10.9%, year-on-year decline. But already back to more than 20% in the third quarter, is expected to follow-up with the industry as a whole, operating situation has improved significantly.
LED phase ii plans to expand 3 times, grasp the time node rapid expansion. The early stage of the company has been through the issuance of convertible bonds to raise 510 million yuan, because the industry is not clear, delayed the production schedule. Industry operating situation in the third quarter after thawing, actively pushing forward the construction of the second phase capacity has now purchasing equipment, plans to expand capacity equivalent to 1. 3 times, when the capacity will reach 800000, significantly increase. Old machines for the new machine is used compared to other competitors have significantly higher cost performance, profitability is expected to follow-up security products is expected to gradually manifests its competitiveness. Due to the early stage of the company has mature MOCVD equipment debugging and production experience, production capacity is expected to fast, gradually put into production at the beginning of next year.