Analysis on investment trend of China's LED industry

The LED industry has a long industrial chain (including upstream, midstream and downstream products and Applications), technical characteristics and capital characteristics difference of each area is large, from upstream to midstream and downstream industries, gradually reduce the barriers to entry. The upstream epitaxial wafer with a typical "double high" (high technology and high technology content of capital), chip high, relatively capital intensive, downstream packaging in the technology content and capital investment is lower, and the application of the technological content of products and minimum capital investment. Only from the perspective of investment scale, LED industry chain in all aspects of the situation is as follows:

LED industry chain investment scale estimation

Industrial chain node

Product category

Investment scale

Upstream (EPI)

GaN based epitaxial wafer

More than 100 million yuan

Four yuan epitaxial wafer

More than 60 million yuan

Midstream (chip)

Blue chip

More than 50 million yuan

Red yellow chip

More than 30 million yuan

Downstream (package)

More than 20 million yuan

Application product

Such as flashlights, lights, lights, etc.

Hundreds of thousands or millions

Note: according to small and medium-sized investment scale.

The different characteristics of LED industry chain attract different investment objects. From China's point of view, the extension / the upper and middle reaches of the chip area by capital of powerful enterprises concerned, these enterprises have listed companies (such as LIAN, Jiangxi Changjiang electronics technology, etc.) have abundant capital of private enterprises (such as Shenzhen, Xiamen, three century Jingyuan road in Dalian, the purpose is through beauty etc.) the upper and middle reaches of the high-end cut, strive to occupy the leading position in the field of LED; but the large amount of investment, lack of professional and technical personnel, the investment risk is relatively large, enterprises have invested in the rate of return is not high. The downstream packaging field has recently been high attention of investors, compared to the epitaxial chip "double high", the investment package can not only reduce the technical risk, and the scale of investment is moderate, more close to the market and reduce the market risk, so favored by investors, especially the package for power is more full of expectations; but in the field high quality chip is not fully made, mainly to imports, heteronomy, find it difficult to buy high-quality products, so that the power industry is of great resistance development package. The application of products in the market access threshold is the lowest, directly facing the terminal market, technology risk, low investment and quick recovery, is a small capital to enter the LED industry of choice, such as Christmas lights, lawn lamp, flashlight, lights, lights and other products, such enterprises in Shenzhen, Guangzhou, Xiamen, Ningbo other places have formed the industrial agglomeration; but in the field of low barriers to entry, the market competition is becoming increasingly fierce, in order to survival and development of enterprises play a vital role, most manufacturers adopt low-cost competitive strategy, product quality, lack of basic guarantee.

MOCVD system and packaging equipment is one of the important bottlenecks in the development of semiconductor lighting industry in china. At present, the Institute of semiconductors, Chinese Electronic Technology Group forty-eighth Research Institute and Nanchang University and other units have begun to develop the MOCVD system in the relevant government plans to support, and achieved good results; Institute of Electronic Science and Technology Group forty-fifth China in investment with packaging equipment (such as bonder etc.) development and industrialization.

The development of LED industry in China's Taiwan region is a typical downstream cutting mode, that is, through more than and 20 years of experience in the downstream packaging field, and gradually extended to the upstream / midstream epitaxial chip / chip area. Currently, there are more than 10 downstream packaging manufacturers in Taiwan and the upper reaches of the 14 epitaxial film manufacturers. In the whole industry chain investment, from the beginning of 2000 increased sharply, especially in 2003 expanded its production capacity has reached a new height, and many manufacturers have to extend their business to the upstream and midstream, upstream, midstream and downstream manufacturers of cross shareholding phenomenon has become more evident, which is also an investment strategy alliance.

In the downstream of the LED package, LED package in 1975 business based Lite on technology company was established, marking the Taiwan officially opened the door LED. Although the history of Taiwan into the field of LED packaging earlier, but the early investment mainly in the low-end ordinary brightness LED, due to lower product prices, so the proportion of global output is not high. In fact, a big increase in the field of high-end packaging investment boom in Taiwan area are mainly from the beginning of 2000 the demand for mobile phone, SMD LED led to a surge in demand, Taiwan manufacturers have investment in SMD LED, the Taiwan accounted for global output ratio increased gradually. But because of over optimistic about the mobile phone market, the manufacturers to expand SMD production line (manufacturers capacity expansion the biggest year of 2003), because Taiwan packaging factory still in China and South Korea as the main sales market, affected by the mobile phone, high inventory, including billion optoelectronics, Baihong photoelectric and Hongqi photoelectric first tier manufacturers did not reach the expected goal. On the other hand, in the automotive market, due to the certification time is long, and the growth trend is relatively flat, the market demand is still small. Obviously, at present because mobile phone backlight applications become saturated, new applications (large size LCD backlight and automotive applications) are still unable to quickly converge on Taiwan packaging manufacturers, production capacity expansion has come to an end, business strategy have turned to diversification and differentiation, such as billion light technology focus cultivate OLED become the second profit growth point, canyuan and the realization of the ITO electric blue LED production.