China Optoelectronics: LED industry in short supply

"We are now in full production, as far as I know, the main manufacturers in the industry are now in full production, the short-term memory demand in a certain industry chain, generally have increased demand, is expected in the two quarter and three quarter, the supply and demand situation will be more intense." Yesterday afternoon, Hua Guang photoelectric annual general meeting held, the company president Liu Rong said in an interview with the Zhengbao reporter.

Hua photoelectric is the second largest LED chip manufacturer, the current monthly production capacity of 700 thousand pieces, and has a production capacity of up to 1 million pieces, a monthly base of Yiwu under construction, will begin in July this year, gradually put into production. In the field of multi screen display, Hua Guang's LED chip has accounted for more than 1/3 of the domestic market share.

An optoelectronic industry "boss" has taken the lead in prices in January this year, the reason is the rapid rise in prices of raw materials, the cost is increasing rapidly.

"Some of the product prices are normal, may be 5% or 10%, but the overall price increases are not obvious."." Liu Rong said that in response to changes in the market situation, each company will adopt different strategies, the main way is to adjust the photoelectric product mix, the production capacity to focus on higher margin products.

Liu Rong believes that the industry supply and demand tension is mainly related to two aspects: one is the continued growth of downstream demand, especially the lighting of the consumer goods industry explosive growth; two is the industry's own adjustment, over the past two or three years, almost no expansion, HC semitek is almost the only a contrarian expansion company. Retrieve public information can be found, affected by the serious excess industry supply stage, the past few years, the LED industry was a serious loss, which not only restricts the further investment in the industry, the enterprise has been part of investment also choose to exit, leaving no small market space.

Liu Rong pointed out that, after a depth adjustment, the entire LED industry is expected to maintain a relatively stable development situation, this is the day before the company equity incentive plan target emboldened.

"We still have confidence, is a low base, 2016 net profit after deduction of non only 25 million 510 thousand, to reach 5 hundred million in 2020 (after deduction of non), we think there are still opportunities; two is the company currently is in a stage of rapid growth, the company in 2016 operating income increased by 65% this year, should be able to maintain." Liu Rong said that with the release of the company's production capacity, as long as the overall stability of the industry environment, it should be able to achieve its goals.

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