On the Chinese economy to the LED chip industry

Recently, the large and small old media new media authority scraper. Authoritative interpretation and guidance of China's economy is undoubtedly an important indicator of China's policy direction, the LED industry, and what can be obtained from it?

One of the most important, rather than the trend of economic L judgment.

In the first quarter of this year, because of the reasons for credit easing, the economy began to pick up signs, and LED industry has begun to improve, which is certainly a good phenomenon. But the authorities believe that it is difficult to use "good start", "early spring" and other simple concepts described, because it is the lever drive, can not be sustained, although alleviate the momentum of the economic downturn, but it is not a healthy cycle.

However, the LED industry has been stimulated in this spring, but also set off a new round of expansion of production capacity.

HC semitek extension project in Yiwu Industrial Park building LED epitaxy, chip and industrial chain, is expected to total investment of about 6 billion yuan, with an area of about 350 acres, plans within 5 years after the production in the construction permits.

According to LEDinside research, Sanan optoelectronics is also expected to add 60 MOCVD in 2016. Australia Shunchang, also plans to expand the harmony of photoelectric wafer and chip production capacity in 2016, deal with the current chip market tight supply situation.

However, the market really so hot it? In fact, according to LEDinside analysis, LED industry has gradually entered a mature period of stable development, it is difficult to reproduce the growth of high-speed growth miracle. In several major downstream LED industry to the sea in 1: a large backlight LED demand decline, but under the impetus of VR technology, OLED replacement tide has come, the late 2017, LED backlight will disappear a lot of demand; 2 LED lighting demand growth has gradually stabilized, difficult to achieve explosive growth 3; small pitch screen demand growth is one of the biggest bright spot, however, as the technology dividend disappeared, a large number of new competitors to join, but also gradually eroded profits, affect the future development of space, it is also not too high expectations.

In fact, LED chip industry has been caught in the pig cycle. The so-called pig cycle is a kind of economic phenomenon, refers to the high prices hurt people, the price of cheap farmers, the cyclical changes in the price of pork. Pig cycle cycle track is generally: the prices of sow herds surge, increase the supply of live pigs, meat prices fell, reducing the supply of live pigs - eliminated a large number of sows - meat prices. The price of pork rose to stimulate the enthusiasm of farmers caused by supply increases, supply increases resulting decline in the price of meat, meat prices fell blow to the enthusiasm of farmers caused by a shortage of supply, the supply shortage also makes the prices, again and again, which formed the so-called pig cycle".

The LED chip industry are similar, chip prices (prices) rose - manufacturers buy MOCVD (sow herds) (pig) - chip supply increased - chip prices (prices) fell firm bankruptcy MOCVD idle equipment (SOW) - (pig) should be reduced for chip chip prices (prices) rose. Sow to slaughter pigs also about two years, two years after the pig slaughter began to fall out of sows to 1 years, to the price of pork rose to 1 years, because of the release of MOCVD about two years from order to capacity, and then from out of production but also to pile up in excess of requirement, for two years, LED chip industry and pig cycle cycle almost it is 4 years.

Fluctuations in pork prices are highly similar to LED chip price fluctuations.

In the past few years, the LED chip can lower demand continues to increase, so each MOCVD device is not eliminated is so painful, the equivalent of LED industry in a period of growth in demand for pork (similar to the beginning of reform and opening up Chinese, per capita meat consumption continues to increase, but if not explosive) future reproduction of downstream demand once the growth, chip prices plummeted again, new capacity will face a huge risk of profit.

The authorities have given guidance in the future Chinese economy will be L, not U, but also to bet big reversal, it is fraught with grim possibilities.

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