Rapid expansion of production capacity, the three major LED chip giants continued to grow

In 2017, LED chip market demand continued to grow, chip price trend was basically stable, chip enterprises tightened the progress of expansion. According to the state advisory LED Research Center (LEDinside) statistics, the production of LED chip MOCVD equipment, the global number of additional installation in 2017 estimated at 401 units (K465i equivalent), is the peak since 2011 to expand capacity.

However, the main force of this round of expansion is the Chinese mainland manufacturers such as San an optoelectronic, hucan optoelectronic, Shunchang and so on. LEDinside said that with the release of new capacity, the cumulative installation of China's mainland MOCVD in 2017 accounted for 54% of the global proportion, and the LED chip capacity accounted for 58% more.

These changes confirm the trend of LED chip industry transfer to China. With the small gap between domestic technology and international big factory technology, and the active promotion of domestic government policies, foreign enterprises slow down the pace of expanding production, even some enterprises are shrinking capacity gradually, the domestic LED chip capacity is becoming higher and higher. In the long run, the domestic LED chip market size will continue to expand, especially in the past. The market share of the first echelon LED chip manufacturers will be significantly increased.

As far as the LED chip capacity of specific manufacturers is concerned, by the end of 2017, three an optoelectronic (two inch), 1 million 700 thousand pieces / month (two inch) and 1 million tablets / month (two inch) in Shunchang, compared with 92.86%, 142.86% and 488.24% at the end of 2016.

At the same time the capacity expansion, the three chip manufacturers have continued to increase the productivity utilization. Shunchang has said that the first quarter of the company's LED business is normal, 400 thousand new production capacity is in order, and the equipment is gradually starting to be installed in the factory, and it is expected to reach production in the three quarter. At present, the LED chip capacity is in full production. According to the financial report of the 2017 year, the capacity utilization of the LED chip of hucan optoelectronic is about 94%, and the utilization of substrate capacity is up to 98%.

Benefiting from the rapid expansion of production capacity, the performance of San an optoelectronic, hucan optoelectronic and Shunchang in 2017 has achieved rapid growth. In terms of revenue, San an optoelectronic topped the list by 8 billion 394 million, up 33.82% from a year earlier, while Shunchang was second in 3 billion 588 million, up 86.32%, and hucan optoelectronics was third in 2 billion 630 million, up 66.21% over the same period. On the net profit level, San an optoelectronics crowned the "profit king" by 3 billion 164 million again, up 46.04% from a year earlier, while hucan optoelectronic was second in 502 million, 87.92%, and third in Shunchang, with an increase of 72.36% over the same period.

According to the financial report of the first quarter of 2018, the net profit of San an optoelectronic, Hua can optoelectronic and Shunchang 1Q18 was 968 million, 143 million yuan and 89 million 781 thousand yuan respectively, with a year-on-year increase of 40.14%, 76.84%, and 40.70%. In this view, the overall market environment of LED chip in 2018 will continue to basically continue in 2017.

In 2018, the LED chip plant will further release capacity and will continue to expand its chip capacity in a timely manner. For example, San an optoelectronic speeds up the infrastructure construction of Quanzhou Nanan project; hucan optoelectronic will continue to promote the construction of the LED red yellow chip, blue and green chip and its extension chips of the Suzhou subsidiary. Shunchang will do a good job of expanding the production project, making the existing capacity up to 1 million 400 thousand pieces a month.

However, with the continuous expansion of key manufacturers in 2018 and the further release of production capacity, there may still be fierce competition in the specific segment market and the situation of coexistence of opportunities and risks. Perhaps in view of this, major manufacturers have laid out new application markets, such as MiniLED and MicroLED, which show the application of products. Both MiniLED and MicroLED belong to LED, which are roughly the same as the traditional LED production equipment, but technology is a qualitative leap, and the requirements for stability and consistency are very high. From the point of view of the application of the product, the products made by MiniLED and MicroLED are excellent in terms of clarity, quality, thickness, and reaction speed, especially the MicroLED solutions are unparalleled in other applications. Once the scale is applied, it will magnify the need for space. In addition, the innovative application of light medical, safety, sterilization and disinfection will become a new growth point and growing power.

According to LEDinside, San an optoelectronic has long-term technical reserves in the MicroLED and Mini-LED fields; hucan optoelectronic has begun batch production and sales of Mini LED, and actively cooperates closely with international manufacturers to develop Micro LED; in 2018, Shunchang will increase the technical reserves of MiniLED and MicroLED. (LEDinside Nicole)

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