On the one hand, the capacity expansion caused by the large-scale procurement of upstream equipment, and on the other hand, the slowdown in the growth of downstream demand. At the time when the actual production capacity has not been released, the market environment faced by China's LED chip manufacturers is undergoing subtle changes.
Policy-driven large-scale equipment procurement
The large-scale application of the liquid crystal backlight field has made the LED industry develop rapidly in recent years. At the same time, due to the surge in demand from downstream companies and related subsidy policies, global LED production capacity has shown a trend of shifting to China from 2009.
According to the incomplete statistics of the High-tech LED Industry Research Institute (GLII) , in 2009, the LED industry announced an investment plan of 22 billion yuan; in 2010, the domestic LED industry investment amounted to nearly 60 billion yuan, of which only the listed company LED investment plan amount It is more than 30 billion yuan. Including Sanan Optoelectronics (600703) plans to invest up to 20 billion yuan, Dehao Runda (002005) announced 4.1 billion yuan to LED.
The upstream chip manufacturing that entered the high threshold is the main reason for the large increase in the investment amount of LED industry. “Our plan was to open the market through downstream applications and then gradually carry out chip manufacturing. However, after comprehensive consideration of market environment and policy support, the company chose to take the chip production directly.†Dehao Runda related person in charge The China Securities Journal reporter said that the government's subsidy policy has played an important role in promoting manufacturers' investment in LED chip manufacturing.
According to analysts, the government provides generous policy support for the introduction of metal organic chemical vapor deposition (MOCVD) equipment for the production of GaN LEDs. The latest research report from IMS Research, a market research organization, shows that between 2010 and 2012, China is expected to spend $1.6 billion on MOCVD equipment, and it will provide up to $1.8 million in subsidies for each piece of equipment. In addition, local governments have proposed lowering Tax rates, accelerated equipment trade-in and free land use and other preferential measures.
Driven by the Chinese market, MOCVD global shipments have reached record highs since 2009, from 100-200 units per year to 786 units in 2010. It is expected that shipments will reach 790 units in 2011. . According to IMS Research, it is conservatively expected that domestic wafer production capacity will grow by 54% in 2010, and the growth rate will reach 74% in 2011.
Stable demand affects industry growth
However, before the domestic LED production capacity has not been released, the LCD TV market's pulling effect on LEDs is slowing down.
Due to technological advances, the demand for LEDs per LED TV and display panel is rapidly decreasing. It is understood that from the second half of 2009 to the first half of 2010, the number of LEDs required for each panel has decreased by 22%-27%, and in the second half of 2010, it has dropped by 34%-38%. In just one year, the number of LEDs used in each panel fell sharply by 51%-54%, far exceeding the manufacturer's expectations.
In addition, due to the high price of LED TVs, LCD TV sales began to slow down in the third quarter of 2010, resulting in a decrease in demand for upstream products such as LEDs, further affecting the capacity utilization of the LED industry. IMS Research believes that LED supply surplus will become more and more serious in the expectation that supply growth will further exceed demand growth in 2011 and 2012.
Overall, under the influence of the penetration of the LED TV industry and the gradual opening of the lighting market, the total scale of the LED industry will continue to grow rapidly. Analysts believe that LED will expand its application in the field of backlight products, and its penetration rate will be faster than that of general lighting applications. In addition, by 2015, the general revenue of LEDs will increase the revenue growth caused by LEDs. The decline in revenue caused by the saturation.
"We can foresee that the LED market will grow healthily, but it is difficult to say whether the relevant manufacturers can have the same good profit." IMS Research said that LED excess led to a decline in capacity utilization and slower production growth, plus China The MOCVD stimulus plan will eventually end, and there are many variables in the prospects of LED chip manufacturers.
Policy-driven large-scale equipment procurement
The large-scale application of the liquid crystal backlight field has made the LED industry develop rapidly in recent years. At the same time, due to the surge in demand from downstream companies and related subsidy policies, global LED production capacity has shown a trend of shifting to China from 2009.
According to the incomplete statistics of the High-tech LED Industry Research Institute (GLII) , in 2009, the LED industry announced an investment plan of 22 billion yuan; in 2010, the domestic LED industry investment amounted to nearly 60 billion yuan, of which only the listed company LED investment plan amount It is more than 30 billion yuan. Including Sanan Optoelectronics (600703) plans to invest up to 20 billion yuan, Dehao Runda (002005) announced 4.1 billion yuan to LED.
The upstream chip manufacturing that entered the high threshold is the main reason for the large increase in the investment amount of LED industry. “Our plan was to open the market through downstream applications and then gradually carry out chip manufacturing. However, after comprehensive consideration of market environment and policy support, the company chose to take the chip production directly.†Dehao Runda related person in charge The China Securities Journal reporter said that the government's subsidy policy has played an important role in promoting manufacturers' investment in LED chip manufacturing.
According to analysts, the government provides generous policy support for the introduction of metal organic chemical vapor deposition (MOCVD) equipment for the production of GaN LEDs. The latest research report from IMS Research, a market research organization, shows that between 2010 and 2012, China is expected to spend $1.6 billion on MOCVD equipment, and it will provide up to $1.8 million in subsidies for each piece of equipment. In addition, local governments have proposed lowering Tax rates, accelerated equipment trade-in and free land use and other preferential measures.
Driven by the Chinese market, MOCVD global shipments have reached record highs since 2009, from 100-200 units per year to 786 units in 2010. It is expected that shipments will reach 790 units in 2011. . According to IMS Research, it is conservatively expected that domestic wafer production capacity will grow by 54% in 2010, and the growth rate will reach 74% in 2011.
Stable demand affects industry growth
However, before the domestic LED production capacity has not been released, the LCD TV market's pulling effect on LEDs is slowing down.
Due to technological advances, the demand for LEDs per LED TV and display panel is rapidly decreasing. It is understood that from the second half of 2009 to the first half of 2010, the number of LEDs required for each panel has decreased by 22%-27%, and in the second half of 2010, it has dropped by 34%-38%. In just one year, the number of LEDs used in each panel fell sharply by 51%-54%, far exceeding the manufacturer's expectations.
In addition, due to the high price of LED TVs, LCD TV sales began to slow down in the third quarter of 2010, resulting in a decrease in demand for upstream products such as LEDs, further affecting the capacity utilization of the LED industry. IMS Research believes that LED supply surplus will become more and more serious in the expectation that supply growth will further exceed demand growth in 2011 and 2012.
Overall, under the influence of the penetration of the LED TV industry and the gradual opening of the lighting market, the total scale of the LED industry will continue to grow rapidly. Analysts believe that LED will expand its application in the field of backlight products, and its penetration rate will be faster than that of general lighting applications. In addition, by 2015, the general revenue of LEDs will increase the revenue growth caused by LEDs. The decline in revenue caused by the saturation.
"We can foresee that the LED market will grow healthily, but it is difficult to say whether the relevant manufacturers can have the same good profit." IMS Research said that LED excess led to a decline in capacity utilization and slower production growth, plus China The MOCVD stimulus plan will eventually end, and there are many variables in the prospects of LED chip manufacturers.
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