The future of China's LED will face enormous opportunities for development

China is the world's largest producer of lighting, the second largest exporter, semiconductor lighting industry has a strong industrial base, but also made it clear that the policy support of the industry, so the future of LED in China will face great opportunities for development. Recommendations concern LIAN photoelectric (600363) and Silan (600460). As a new kind of lighting technology, LED is a kind of light emitting device which uses semiconductor chip as light emitting material and directly converts electric energy into light energy. Since 1960s the world's first semiconductor light-emitting diode was born, LED lighting has the characteristics of long life, energy saving, safety, environmental protection, rich color characteristics, known as the third revolution of human lighting. The global LED market size of approximately $4 billion 700 million in 2004, iSuppli in 2008 is expected to grow to $6 billion 900 million, including high brightness and high brightness LED market will grow at an average annual rate of about 20%, the market scale will reach $1 billion 600 million. The future landscape lighting and general lighting LED market growth rate is the fastest, iSuppli is expected to landscape lighting LED market growth rate will reach 50%, the market share will increase from 2003 to 2% in 2008 to 8%. 2004 general lighting LED sales of $94 million in 2010 will grow to $875 million, with an average annual growth rate of 52.3%. The overall technical strength of China's LED industry is not strong, in the initial stage, the size of the enterprise is generally small. But the LED industry has attracted the attention of the countries, the "national long-term science and technology development plan" will be clearly classified as "semiconductor lighting products in key areas and priority themes", put forward "semiconductor lighting products focus on high efficiency and energy saving, long life". In the field of lighting, China is the world's largest producer of lighting appliances, the second largest exporter, semiconductor lighting industry has a strong industrial base, so the future of China's LED will face enormous opportunities for development. LIAN Optoelectronics (600363): the company is China's earliest and largest LED R & D and production enterprises, in 2006 the company's LED revenue will reach more than $500 million. The company has a complete LED industry chain, from epitaxial, chip to package has formed a certain scale. Due to technical barriers to LED high, large capital investment, a clear LIAN LED as the core business development ideas, focus resources to increase investment in LED, and strive to form a 300 thousand square inch, 12 billion grain chip targets. On the other hand, the company also adjusted the industrial development ideas, the direction of the next step is to focus on the development of LED LED application development through the downstream low barriers, such as the LED backlight and application products, to promote the development and extension of the upstream chip. The company expects 06, 07 years of performance of $0.11 and $0.29, given the investment rating to buy, target price of $3 for $8.7. Micro Bo (600460): the company began to enter the field of LED in 2004, mainly through the company's subsidiaries of the. Relying on its own rich experience in the development, production and sales of traditional IC devices, as well as the existing semiconductor production, manufacturing platform, the company quickly mastered the key technology of the LED chip. Silan LED using flip chip structure, positioning in the high-end, the overall technology in the domestic leading level. In industrial development, Silan has a clear industrial layout of LED, starting from the middle reaches of the chip, and gradually extended to packaging and application and extension of the upstream and downstream, through cooperation with foreign giants, to enhance the overall level of. Silan LED rapid development, profitability is very strong, at the beginning of 06 LED monthly income is 1 million yuan, to the end of the year has reached 10 million yuan / month, 07 years is expected to reach 150 million yuan. With the status of Silan in LED industry gradually established, its value will be the ascension of the whole, giving overweight investment rating.