LEDinside: China LED packaging manufacturers have expanded production, the industry is expected to hit bottom

TrendForce trendforce's LED industry research brand LEDinside observed, 2016 LED industry boom year rise, prices continued to decline in LED penetration further enhance, also driven by the emerging markets of India, Southeast Asia, LED market demand has greatly improved compared to the same period. In recent years, many companies have signed a strategic cooperation agreement between the signs more obvious, so the proportion of large market share will continue to improve, which is also the main driving force for expansion of production.

Market share increased, the expansion of the production of large signs

Table 1, part of China's LED packaging manufacturers expand production schedule

Source: LEDinside finishing

Recently, the company announced the announcement, in October 10th, the National Star photoelectric announcement, intends to invest no more than 400 million yuan to expand the production of LED packaging projects. November 2015 to date, China Star optoelectronics has announced the 3 LED package expansion plan, the first two times the investment of RMB 400 million and RMB 240 million yuan project, production capacity has been gradually released.

In recent years, including nationstar optoelectronics, etc., sferic Linsen manufacturers, the new production capacity continue to release, the next year, these companies will continue to expand production, but with the expansion of the group a few years ago is not the same, manufacturers of expansion of the current basic to large enterprises, small and medium enterprises less the expansion of the situation.

Market competition is still fierce, lower profitability

Although the manufacturers have expanded production, but the LED market competition is still fierce, packaging manufacturers profitability is still low. According to LEDinside statistics, 2Q16 major Chinese manufacturers average gross margin was 24.5%, down by 1 percentage points. Part of the gross profit margin is ridiculously low, such as lighting LED field, Ruifeng photoelectric 1H16 gross margin of only 10.9%, poly fly photoelectric 1H16 gross margin was only 9.4%. However, to enter the 3Q16, due to the rising price of chips, some manufacturers also package price adjustment, gross margin is expected to be improved.

Figure 1, the main LED packaging manufacturers gross margin changes

Prices slowed down, the company's profitability is expected to improve

May 2016, the first to take part in the price of crystal chip processing, but at that time the Chinese manufacturers did not follow, but the price has stabilized. In September, including three, Tongfang, science, Chinese chip manufacturers have on small size chip prices are rising processing. Small spacing display market demand is exuberant, the small size display chip demand. Also in the lighting field, because the downstream manufacturers of lamps with high luminous efficiency pursuit, also makes the small size of the lighting chip demand rose.

Due to the sharp decline in the price of small chips in 2015, resulting in a number of chip manufacturers gradually reduce the size of the chip production capacity, resulting in a short period of time, the size of small chips in short supply, prices will rise. Due to the rising price of chips, device prices have begun to rise, especially in the field of display, Mu Linsen, an optical and optical XinDa and other manufacturers, while the price increase announced. Compared to 2015, LED packaging prices stabilized in 2016.

Figure 2, 2016 China LED packaging prices slowed down (USD/K)

Source: LEDinside

Shuffle plus degree, the industry is expected to touch bottom

Since 2014, the fierce market competition has led to a decline in profitability, many small and medium-sized packaging enterprises were forced to exit, the emergence of mergers and acquisitions also led to the larger scale of large manufacturers. Our company before alone, however, nationstar, honglitronic scale gradually increases, this year is expected to exceed 2 billion yuan in revenue, the other second camp manufacturers scale gradually increases. This round of expansion wave, dominated by large enterprises, including the country star, Hongli, Linsen, XinDa and other large manufacturers, expanding production capacity, will accelerate the industry reshuffle. LEDinsdie believes that the LED industry will gradually enter the stage of bottoming out, the city's market share will continue to expand, bargaining power will be improved, profitability will gradually improve.

Text Allen Yu Bin /LEDinside

LEDinside2016 China LED chip and packaging industry market report

Publication date: June 30, 2016

Language: Chinese / English

Format: PDF

Pages: 244 pages

Chapter 1: 2015-2020 China LED packaging market size, market forces, according to power differentiation, the top 10 revenue rankings

The second chapter: the increase of market segments, 2016-2020 backlight, China lighting, LED display market size; supplier supply chain - backlight, lighting and display; the top 10 LED vendor revenue Rankings - backlight, lighting and display

The third chapter: 2014-2015 merger and reorganization and analysis of the event (analysis of the industry's major M & A cases, the reasons behind the merger, the impact on the industry)

The fourth chapter: the dynamics of 20 Chinese packaging manufacturers, including operations, finance, production capacity, key customers, LEDinside Perspective

The fifth chapter: the overall revenue and gross profit of 17 international and Taiwan manufacturers, China's revenue performance, operating conditions, major products, key customers

The sixth chapter: comparison of international manufacturers, Chinese manufacturers and China's overall revenue situation

U city scene: from the development of Chinese industry, and then talk about market opportunities and threats

U Company: to discuss the product, technical energy, expansion plan and future development of Chinese packaging manufacturers

U strategic aspects: International, Taiwan major packaging manufacturers in the Chinese market development trends, opportunities and threats

The seventh chapter: the 16 key points