150 billion LED industrial map: foreign swallowed 70% profit

"Master wafer and chip core technology and manufacturing enterprises, occupy the entire 70% profit chain. "In August 26th, Chinese Association of lighting semiconductor lighting Specialized Committee director Tang Guoqing sketched a picture of profit LED industry told reporters," even in the remaining 30% profits, and 20% chip packaging enterprises get the remaining 10%, only to the terminal application link".

But the terminal application is the vast majority of domestic LED companies gathered in the field.

According to LED Industry Research Institute - LEDinside statistics, as of the end of 2009, only the Pearl River Delta region, there are more than 1 thousand and 300 companies engaged in the middle and lower reaches of LED business, of which there are more than 900 Shenzhen. More than 90% of the local LED companies to 10% of the profits in this fight each other in competition, the market dilemma as can be imagined (see the newspaper reported in July 19, 2010 of the "90%LED Street business losses" investigation ").

Tang Guoqing's other identity is CREE (NASDAQ: Cree), general manager of china. With OSRAM, PHILPS, Nichia and said four of the world's largest LED chip giant CREE, is one of the "70% profit" vested interest. CREE has just released its annual report for the year ended June 30, 2010 data show that its fiscal year 2010 revenue reached $850 million, an increase of 53%; net profit increased by $152 million 300 thousand to $402%.

Foreign LED China feast

China LED lighting market is an important factor in the growth of CREE revenue. In August 26th, CREE's global strategy and business development, vice president of business Christopher M. James told reporters that, CREE has plans to transfer the LED industry to focus Chinese, most of the company's 2010 $167 million investment plan will be used in China.

In November last year, CREE invested 2 billion yuan in Guangdong, Huizhou set up a chip production base, the production line is expected to be fully launched in this year's mass production in December, when the production capacity will reach 1 million 500 thousand.

Christopher M. James believes that CREE sales in China rapid growth and get excess profits of the reasons can be attributed to the following factors: one is that CREE has a complete layout of the LED industry chain, covering material from the wafer, chip package and lighting solutions to all industrial processes; the second is CREE continued to increase in China in the capital, close to the market and customers at the same time, also has the advantage of tax. At present, China Customs is subject to 20% import duty on each LED chip.

CREE reported fiscal 2010, the Asian market revenue accounted for its total revenue of about 2/3, its revenue growth in mainland China and Hongkong up to 100%.

Tang Guoqing pointed out that even in the core of the epitaxial wafer, chip manufacturing, not all companies can enjoy a high margin. At present, the global LED patent core technology is mainly in the hands of the hands of the four giants mentioned above, the technical monopoly advantage of these core enterprises to obtain excess profits. While looking at the Chinese mainland, with LED chip production capacity of only 62 companies, even if there is a large-scale packaging capacity of enterprises, the layout of the upper reaches of the industrial chain but also hundreds of.

"90% of the loss of LED companies a bit exaggerated, the recent domestic capital market on behalf of a number of LED companies, reported a good profit margin. Tang Guoqing believes that the current situation of the loss of domestic LED companies, or to find a way out from the industrial chain layout and corporate strategic planning.

For domestic enterprises layout in the upstream of the LED, Tang Guoqing analysis pointed out that, for example Sanan Optoelectronics (600703.SH) red yellow light product profit is low, adjust the blue green and automotive headlight products profit rate is obviously improved. For example, Silan (600460.SH), Wuhan Huacan, previously only chip production line, epitaxial wafers need to outsource products and reduce the rate of profit. The two companies have to finance the expansion of production at the beginning of the year, with the epitaxial chip and chip manufacturing advantages of the industrial chain, the profit margins for the better.

For the domestic chip packaging companies, it should be said that 90% are making money, but the production rate of profit margin determines the difference. Tang Guoqing said that the concept of the so-called 90% enterprise losses should be focused on the end of the LED industry chain application market.

150 billion dollar market

Whether it is the first application of ambient light, or the rapid growth of automotive lighting and LED TV display light source, China has undoubtedly become the world's largest LED lighting applications market. "The LED Industry Research Center Director Zhang Xiaofei said, in the full color LED display, LED traffic lights, solar LED lights, LED landscape lighting production, China now is the first in the world.

It is expected that by 2010 China's LED sales value will exceed 150 billion yuan, the data is in the year of 2008, and the annual growth rate of 30% of the rapid growth of two.

In 2010, Shanghai, World Expo is becoming the world's largest LED show, the Expo site is also becoming the world's largest LED demonstration area. "The night of August 25th, invited the chief planner, Shanghai Expo Park park landscape lighting designer, Tongji University School of architecture professor Hao Luoxi led the news media tour expo.

Hao Luoxi said that at present in the Expo site uses 1 billion 50 million LED chips, the Expo venues indoor lighting in about 80% of the LED green light, compared to ordinary incandescent lamp energy saving up to about 90%, "this large-scale centralized demonstration display LED application in the future in the city construction is very extensive, the market potential is enormous".

In the industrial scale and market applications, China is undoubtedly a big country LED. "Christopher M. James