[Reuters reporter Hu Yanling LED Engineering] September 27, three optical announced that the company will invest in research, development and manufacture of sapphire substrate, the project total investment of 2.5 billion yuan in Quanzhou, Fujian Province (Head Lake) photoelectric industrial park. According to the plan, after the project is put into production, it will form 12 million pieces of 2-inch substrates per year, with a total construction period of 3 years, and strive to complete in 2 years. The project was officially opened in October.
This is the latest sapphire investment case in domestic time, and it is also the sixth domestic listed company involved in the LED sapphire substrate business. In the past year, such investment cases have been staged in almost every province in China.
However, behind the glamorous “sapphire†investment projects in China, the market is bleak. I have to say that, this aluminum oxide, which once sold out of stock and has to increase the price, can only escape the fate of falling prices.
From more than 30 US dollars (2-inch sapphire substrate) at the beginning of this year to about 10 US dollars today, many sapphire manufacturers repeatedly sighed "I can't afford to hurt" when interviewed by Gaogong LED reporter.
At the same time, negative market expectations have also greatly spurred the enthusiasm of the previous sapphire substrate investors, many investment projects have stopped the drastic progress, and instead changed to wait and see attitudes.
The price dropped by 60% in half a year
"The price has fallen into a mess, I don't know what happened!" Recently, a domestic sapphire manufacturer complained to the high-tech LED reporter that the manufacturer entered the market at a high price and enjoyed the high profit return from the high price of sapphire in the future. It was dragged into the quagmire of price cuts.
Taking a two-inch sapphire substrate as an example, the average manufacturer's product price in the first quarter of 2011 was around $30 per piece, but by September, the price had dropped to around $10, a drop of more than 60%. Gap!
"In 2009, the price of sapphire was only 9 US dollars, basically keeping a small profit, even lower than the profits of the traditional industry. The price is too low to directly damage the sapphire manufacturer's expansion enthusiasm, resulting in the decline of sapphire capacity. Last year, LED backlight and application products The penetration rate has increased significantly, which has led to a shortage of sapphire market, so there is a retaliatory rise in the price of the latter.†Huang Liangwei, technical director of Yuanliang Technology, told the high-tech LED reporter.
The market data also confirmed Huang Xiaowei's statement. According to statistics from the authoritative market research institute Gaogong LED Industry Research Institute (GLII), the global supply of sapphire substrates in 2010 was 37.85 million, while the demand was 42.4 million.
The continuous rise in prices has stimulated a new round of investment boom. Sapphire substrate manufacturers have expanded their production capacity, and the upstream ingot production capacity has been accelerated. More “outsiders†are also eager to gain a share in this field.
However, the direct consequence of the expansion is that the market has rapidly reversed from oversupply last year to an oversupply situation, and sapphire prices have begun to fall sharply. "Since the second half of last year, there have been too many projects in the Changjing project or the substrate processing project in China. At one time, everyone rushed to send samples to the extension manufacturers for trial use. This also directly led to the trend of the price reduction of the extension manufacturers, because the market has already From the selling market to the buyer's market." An industry insider told reporters the reason.
At the same time, the reporter also learned that the inventory of Taiwanese manufacturers is also one of the factors leading to oversupply in the current market. Cai Jinrong, deputy general manager of Jiangsu Jixing Optoelectronics, told reporters: "At the end of last year, the price of sapphire was soaring, and Taiwanese manufacturers began to stock up a lot. But in the first half of this year, the downstream application market did not release the benefits as expected, and most of these have large stocks. It is a listed company, and the inventory time can't be too long, so it starts to cut prices."
At a time when everyone is overwhelmed, the domestic market has once again heard the news of a 2-inch sapphire substrate for $6, which has once again stimulated the market's sensitive nerves. "The main source of the $6 product is two kinds. One is the waste film produced by the ingot during the cutting process. The manufacturer re-sold after processing. There is also a part of the manufacturer's project that has just been put into production and needs to open the market through some price means. However, Huang Xiaowei told reporters that the $6 does not represent the overall market price of the current sapphire substrate. Because customers must have high-end and low-end points, the market is different, the price will naturally be different, manufacturers producing high-brightness chips will certainly not buy products advertised for $6.
This is the latest sapphire investment case in domestic time, and it is also the sixth domestic listed company involved in the LED sapphire substrate business. In the past year, such investment cases have been staged in almost every province in China.
However, behind the glamorous “sapphire†investment projects in China, the market is bleak. I have to say that, this aluminum oxide, which once sold out of stock and has to increase the price, can only escape the fate of falling prices.
From more than 30 US dollars (2-inch sapphire substrate) at the beginning of this year to about 10 US dollars today, many sapphire manufacturers repeatedly sighed "I can't afford to hurt" when interviewed by Gaogong LED reporter.
At the same time, negative market expectations have also greatly spurred the enthusiasm of the previous sapphire substrate investors, many investment projects have stopped the drastic progress, and instead changed to wait and see attitudes.
The price dropped by 60% in half a year
"The price has fallen into a mess, I don't know what happened!" Recently, a domestic sapphire manufacturer complained to the high-tech LED reporter that the manufacturer entered the market at a high price and enjoyed the high profit return from the high price of sapphire in the future. It was dragged into the quagmire of price cuts.
Taking a two-inch sapphire substrate as an example, the average manufacturer's product price in the first quarter of 2011 was around $30 per piece, but by September, the price had dropped to around $10, a drop of more than 60%. Gap!
"In 2009, the price of sapphire was only 9 US dollars, basically keeping a small profit, even lower than the profits of the traditional industry. The price is too low to directly damage the sapphire manufacturer's expansion enthusiasm, resulting in the decline of sapphire capacity. Last year, LED backlight and application products The penetration rate has increased significantly, which has led to a shortage of sapphire market, so there is a retaliatory rise in the price of the latter.†Huang Liangwei, technical director of Yuanliang Technology, told the high-tech LED reporter.
The market data also confirmed Huang Xiaowei's statement. According to statistics from the authoritative market research institute Gaogong LED Industry Research Institute (GLII), the global supply of sapphire substrates in 2010 was 37.85 million, while the demand was 42.4 million.
The continuous rise in prices has stimulated a new round of investment boom. Sapphire substrate manufacturers have expanded their production capacity, and the upstream ingot production capacity has been accelerated. More “outsiders†are also eager to gain a share in this field.
However, the direct consequence of the expansion is that the market has rapidly reversed from oversupply last year to an oversupply situation, and sapphire prices have begun to fall sharply. "Since the second half of last year, there have been too many projects in the Changjing project or the substrate processing project in China. At one time, everyone rushed to send samples to the extension manufacturers for trial use. This also directly led to the trend of the price reduction of the extension manufacturers, because the market has already From the selling market to the buyer's market." An industry insider told reporters the reason.
At the same time, the reporter also learned that the inventory of Taiwanese manufacturers is also one of the factors leading to oversupply in the current market. Cai Jinrong, deputy general manager of Jiangsu Jixing Optoelectronics, told reporters: "At the end of last year, the price of sapphire was soaring, and Taiwanese manufacturers began to stock up a lot. But in the first half of this year, the downstream application market did not release the benefits as expected, and most of these have large stocks. It is a listed company, and the inventory time can't be too long, so it starts to cut prices."
At a time when everyone is overwhelmed, the domestic market has once again heard the news of a 2-inch sapphire substrate for $6, which has once again stimulated the market's sensitive nerves. "The main source of the $6 product is two kinds. One is the waste film produced by the ingot during the cutting process. The manufacturer re-sold after processing. There is also a part of the manufacturer's project that has just been put into production and needs to open the market through some price means. However, Huang Xiaowei told reporters that the $6 does not represent the overall market price of the current sapphire substrate. Because customers must have high-end and low-end points, the market is different, the price will naturally be different, manufacturers producing high-brightness chips will certainly not buy products advertised for $6.
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