LED in the large industrial product price competition pattern will be Hengda return to reason

In September, the prices of raw materials in the LED industry news rumors. From the largest domestic chip companies to Xiamen Sanan optoelectronics XinDa, and even packaging giant chip packaging manufacturers, Linsen came up signal products. The reasons given by the manufacturer without exception price is because the price of raw materials such as artificial bottom as well as increase the cost factor. In fact, since May across the Strait EPISTAR announced this year prices, the major domestic manufacturers had to try. For the price of the chip and package materials, industry insiders have applauded, and to follow up. More professionals said that the price is caused by the normal laws of the market, indicating that LED market competition is gradually return to rational. , chip packaging manufacturers collective price in May this year, the price of the chips EPISTAR fired the first shot, the blue LED prices will raise 15%. Then, three Huacan, other chip manufacturers have also conducted a price adjustment. By the end of August, LED chip, packaging enterprise is collective price, Xiamen three part of small and medium size product prices go up 10%, started in August 25th; amp photoelectric, photoelectric XinDa and Linsen RGB beads have increased 5% price, since the beginning of September 1st implementation. Three optical price adjustment letter shows that raw material prices bottomed out, of which gold (up more than 27% year), the substrate (compared to June rose 30% above); at the same time because of the small power small chip size, the BEOL consumes a large amount of sorting and testing capacity, unit labour cost increases, resulting in back end a sharp decline in output process. Now for some small size product prices go up 10%, and in August 25th started. In the Linsen price adjustment notice, due to changes in the market, resulting in product costs continue to rise, in order to collaborative production development of both sides and maintain good business relationship, according to the actual situation of raw materials prices. The principle of mutual benefit, is scheduled for September 1, 2016 RGB display lamp price raised 5%. XinDa photoelectric price adjustment letter shows that by the upstream chip and support prices rose sharply (generally above 10%), plus labor costs continued to rise, especially on the company's production of RGB lamp in the price increase 5% basis at present. The implementation of the price adjustment since September 1st. The price includes a XinDa in Fujian, Guangdong, An Puguang, Xiamen XinDa XinDa and other four subsidiaries, and the price rises in 5%. The main reason of price adjustment manufacturers given is due to the recent various raw materials and labor costs, the price has exceeded the cost accounting, in order to raise prices and profits remain. From the manufacturer's price adjustment letter can also see that the last period, applied to the raw materials for LED sapphire substrate, aluminum plate, gold etc. have varying degrees of price increases. Sorting through the major manufacturers issued price information is not difficult to find, at present the price of products are LED display chip and package products, especially small pitch products. LEDinside senior analyst Wang Fei believes that the small pitch LED display has entered the market growth, market size is expanding rapidly. The lower space demand and technological progress will lead to small spacing packaging and chip consumption grew rapidly. He believes that the display screen and the backlight packaging products will be small spacing display demand driven prices will rise, some space, "and the lighting package will face downstream extrusion." Prices decline, profits bottomed in fact, LED chip, package and other product prices in recent years all the way down. In the recently held 2016 Strategiesin Light (SIL) and LEDShow conference, senior analyst Stephanie Pruitt said the decline in incredible prices has led to a decline in revenue LED package market. Pruitt pointed out that the second half of 2015, the power LED prices dropped by 30% to 40%. High power LED affected by this small number, but still dropped from 20% to 30%. Pruitt believes that the lighting and backlighting application of substantial price decline is mainly because of the arch-criminal, LED shipments continue to climb. This is also reflected in the semi annual report released in recent major enterprises. In August 20th, Jufei semi annual report released in 2016. Let a person is mixed, the company the first half of this year revenue growth of 57.32% to 655 million yuan, net profit fell 12.56% to 59 million 414 thousand and 400 yuan. In constitute the main business table, Jufei LED lighting product gross margin particularly interesting, the product revenue was 74 million 109 thousand and 600 yuan, 67 million 141 thousand and 200 yuan operating costs, gross profit margin of only 9.4%. Excessive competition is fierce, is already a hot trend in LED industry norm, "injured" not only Jufei a package, leading LED application (including 2015 Linsen lighting and other products) of the gross profit margin of only 7.17%. But this year our semi annual report has not been disclosed, the current gross margin to also can make nothing of it. In addition to the implementation of double main industry of Lehman photoelectric, the first half of 2016 the company achieved operating income of 250 million yuan, an increase of 49.41% over the previous year; the sports resources to achieve sales revenue 25 million 820 thousand yuan, an increase of 77.15%. But it is worth noting that the Lehman photoelectric main business LED, and related packaging products, lighting products and display products, although they all have different rate of growth in revenues, but gross margin fell. Take the LED as an example, the first half of 2016 to achieve revenues of 220 million yuan, gross margin was 29.25%, representing a decrease of 4.06 percentage points. The same is true in the upstream chip industry. According to the three optical semi annual report