LED industry in the process of intensification of the market crisis

Led moment in the lighting industry can be described as one of the most important industry, there will be a lot of concerns and worries behind its development.

Market expansion: a powerful catalyst for enterprise expansion

2010 initial capital market, LED fired a hot plate. The industry of the two leading companies Silan and Optoelectronics have announced the massive expansion of LED chip, significantly accelerate the pace of scale expansion. Among them, Silan intends through private placement fund-raising not more than 600 million yuan, mainly for the expansion of high brightness LED chip production line project, then the LED chip is an annual increase of 7 billion 200 million to 13 billion 200 million a year, wafer production capacity 420 thousand pieces to 570 thousand pieces. Subsequently, Sanan optoelectronics announced expansion planning is more ambitious, the LED industry base in cooperation with the Wuhu municipal government building, not only in the LED epitaxial wafer and chip R & D and production, but also extends to the downstream packaging and application of product development and manufacturing, a total investment of up to 12 billion yuan, only an investment of up to 6 billion planning, the total construction period of 4 years.

And many upstream and downstream enterprises and even amateur companies eager to get the rapid development of the LED share. Such as Elec-Tech Han's laser, and other main business associated with LED is not only involved in the application of the original through mergers and acquisitions and packaging field, have expanded the scale of investment and extends to the upstream and downstream industry chain.

With an optoelectronic three massive expansion as an example, although the size of the 12 billion industry base in Wuhu sparked a lot of controversy, but Sanan optoelectronics chairman Lin Xiucheng in an interview with reporters, still very confident. "The development of LED is earlier and faster than expected," he said, while the Chinese market, the opportunity will be greater.

Lin Xiucheng no reason is not optimistic. 2009, including backlight display and lighting applications, including growth, has been proven and responded, and the industry is considered to be the two main cause of the outbreak of the market in 2010.

According to statistics Ledinside and the Great Wall Securities Research Institute, two major application areas in China in 2008 the output value of LED is the leading landscape lighting (37%) and LCD backlight (28%). According to the alliance national semiconductor lighting project statistics, in 2008 the LED industry chain in China, the packaging industry output value reached 18 billion 500 million yuan, representing an increase of 10% in 2007 to 16 billion 800 million yuan; yield by 82 billion 2007 increased by only 15%, reached 94 billion, which highlighted LED output value reached 14 billion yuan, accounting for LED total sales of 76%; its market application is important as the backlight of liquid crystal display LCD.

In an interview with reporters, many industry insiders pointed out that with the implementation of the LED luminous efficiency, cost reduction and environmental policy, LED is gradually rising in the LCD TV, LCD display and notebook computer and other large size LCD backlight application proportion; large size display backlight will promote the LED industry in high speed growth in 2010. According to Societe Generale Securities analyst Liu Liang forecast: 2010 LCD TV, notebook backlight needs of LED chips were 30 billion and 6 billion.

At present, many domestic and foreign leading home appliance has noticed this trend, and has been in the upper reaches of the layout to ensure the supply of LED backlight. Among them, the domestic SKYWORTH, Konka both have a stake in Shenzhen, a large private LED packaging plant, the amount of strategic investment in tens of millions.

In the lighting field, in accordance with the "opinions" of the development of semiconductor lighting industry, LED products in 2015 the penetration rate of functional lighting, LCD backlight, landscape decoration market will reach more than 20%, 50% and 70%, with an average annual growth rate of semiconductor lighting industry reached 30%.

Pattern of dispute: mergers and acquisitions and expansion raging like a storm

Although market expansion prompted the enterprise scale to accelerate, but in the entire LED industry chain, now have expansion is generally concentrated in the upstream areas, especially for some of the strength of the listed companies, the profit distribution of the industry structure and the unique related.

It is reported that, LED industry generally in accordance with the wafer and chip manufacturing, packaging and LED application is divided into upper, middle and lower reaches; the epitaxial wafer and chip manufacturing is the core of the LED industry chain, but also the highest value-added links, is a typical technology or capital intensive industries and the "three high": encapsulation and barriers application of link in the middle and lower reaches of the low, labor-intensive industries. According to the Great Wall securities statistics, in the LED industry chain, LED epitaxial chips and chips accounted for about 70% of the industry's profits, LED packaging accounted for about between 10 to, while the LED application probably also accounted for between 10 to 20%.

So this kind of, such as Elec-Tech only originally through mergers and acquisitions involved in the application and packaging areas of the company, also going through a private placement fund-raising to get involved in the upstream industry, expand the profit space. Guoxin Securities analyst Wang Nianchun pointed out: the current strength of Elec-Tech who do not have the LED chip manufacturing technology, production capacity, is expected to accelerate the company through the acquisition of relevant intervention LED chip manufacturing. This is also an effective way to get involved in the field of LED companies outside the industry.

But it is worth noting that, although the upstream chip demand, but domestic enterprises do not have the technical advantage, especially in large-size backlight demanding and high-power lighting and other fields, and lack of competitive products.

Relatively, the situation is a lot of good packaging, which is consistent with the global LED industrial transfer trend. From the beginning of the 90s of last century, the technical threshold is not high, and labor intensive LED packaging industry took the lead in China