The supply and demand pattern of LED is changing radically

Lighting and small distance LED demand side are all good for a long time, so the next 2 to 3 years will continue to boost the downstream demand of the LED industry chain, while the overall industrial concentration of LED is increasing, the entry threshold of the whole industry will be improved, the new entry will be reduced, and the government subsidy is in the plan of 13th Five-Year. Step out, making the LED chip supply disordered capacity is restrained, the upstream industrial chain bargaining power is increasing, so we can intuitively feel that the overall supply pattern of LED is undergoing profound changes. LED industry supply and demand structure improvement signs are significant, upstream price increases frequently, the downstream performance is a prominent sign one: in 2016, the upstream of the LED industry chain rises frequently, some products rise more than 15% in March, the packaging enterprises such as wood and crystal platform have raised the price of some products; in May, the crystal electricity is reduced by 25%. In the case, the price rises 15%, and the three an optoelectronic also has a small price rise. In August, the price of chip enterprises such as San an has been promoted in varying degrees. In which the price of small and medium sized products of San an optoelectronic floated 10%, hucan optoelectronic also adjusted the products with lower profits. In September, the wood optoelectronic and XinDa optoelectronic, XinDa optoelectronic The increase of RGB beads is about 5%-10%. According to research and research, in the end of the 2 quarter of 2016, the price of several LED chip enterprises in the industry has begun to recover, and the revenue situation has improved significantly. With crystal energy as an example, in the early September, the power production capacity was full and continued to October. At present, its productivity utilization rate has exceeded 9, of which the blue light machine capacity of about 90%, the single price and the better profit of the red light production line is full load. According to the data, we see that the average price of the mainstream packaging devices has stabilized, compared with the drop of 50%~60% in 2015, the supply and demand relationship of the whole packaging device has been greatly improved, in which the larger package specifications can be seen 5630 and 3030, and the month of 3-4 has declined, but it has tended to be stable in April and is sealed. The price of 2835 in size has remained stable this year, and some of the product prices rose slightly in July. As an example, the stock price has risen by 18% since mid - 6. At present, the demand for the product line has been fully warmer, and the third quarter will be formally into the peak season, rather than only replenishing the stock. Especially TV backlight performance is the best, mainly by the Olympic year of this year's viewing demand driven; from the mainland phone backlight, display screens and other orders will also significantly contribute to the third quarter revenue. According to the data, the global LED bulb fell by about 9%, compared to the 2015 global replacement of 40W bulb prices by 12.4%, which was basically in the normal range of 9.9% substitutes for 60W bulb prices, mainly due to the decrease in the overall consumption of consumables caused by the progress of packaging technology. At the same time, the price of LED bulb in China fell by about 11%. Compared to 2015, the price of replacing 40W bulb in China fell 18.4%, the price of alternative 60W bulb fell 32.37%, the downward trend had been steadily stabilized, the competitive environment in the domestic light bulb market has become increasingly stable, and the supply and demand pattern has gradually improved. There are signs that the supply and demand pattern of LED chips has changed. Sign two: LED lighting enterprise revenue in 2016 ushered in the inflection point, a number of enterprises revenue growth over 40% over the lower reaches of the downstream LED lighting enterprise revenue obviously improved, LED lighting supply and demand pattern has ushered in the turning point, reversing the 15 year decline pattern. Revenue from a number of Listed Companies in the first half of 2016 can be verified, sunshine and Foshan revenue increased 40% year-on-year, Rex revenue increased by more than 90% year on year, because the first half of the 15 year of LED lighting application base is lower, also reflected the worst time has been spent, the downstream LED in 2016 illuminated the overall demand and supply pattern has been used in the lower reaches of 2016. There was an inflection point. Demand side: LED lighting penetration space is still larger, small spacing ushered through UBS data show that in 2015 LED chip end demand has exceeded 90 thousand square inches, is expected to still be able to increase the growth rate of 20% in 2016, although the LED chip luminescence efficiency increases, the LED backlight demand area of the chip will have There must be a decline, but with the further enhancement of the LED lighting penetration and the explosion of small space demand, the demand for the LED chip end will continue to be continued. From the demand analysis one: LED lighting permeability is only 27.2%, "forbidden white" catalyzes the LED replacement of LED lighting penetration only 27.2%. In October 1st, "forbidden white" prompted the LED lighting to further replace the Bai Baichi lamp. 1) lighting is the main application market downstream of LED, WIND data, which is roughly 45% in China. According to DIGITIMES data, the global LED lighting market has also increased significantly in recent years, from $1 billion 750 million in 2009 to $29 billion 900 million in 2015, with an annual growth rate of 60.5%. But its permeability is still not high, only 27.2% in 2015 and more than 30% in 16 years. Therefore, its growth space is still huge; 2) according to China National Development and Reform Commission and five ministries and commissions issued in November 2011 "China phase out of the incandescent lamp road map", the final pilot of the implementation of the incandescent lamp in China is September 30, 2016, and in October 1, 2016, 15W and above ordinary lighting incandescent lamps are banned. Sale and import. This is interpreted by the industry as a "ban on white" in an all-round way, and the market demand for LED lamps and lanterns will be further released. The domestic incandescent lamp has a huge replacement space. In the first half of 2016, the cumulative production of incandescent bulbs was 2 billion 12 million, and the monthly output was 3-3.5 billion. According to CSA Research data, 15 years of domestic LED lighting production capacity of about 6 billion, if completely replaced, the proportion will consume about 60% of the 15 year LED bulb capacity. From the demand side analysis two: the small distance between home and abroad continues to heat up, the next 2 years of 40 billion new demand in the small and domestic small space market continues to be hot, and 17-18 years will still have nearly 40 billion new demand. In recent years, with the advantages of seamless splicing, the small spacing LED display is gradually replacing DLP and LCD splicing and showing the trend of accelerating growth. According to the domestic small spaced screen faucet half a year report, its small spacing TV has signed a new order of 1 billion 100 million yuan, up 104% from the same period last year. In 1-6 months of 2016, the revenue was 482 million yuan, up 93% from the same period last year, and the small distance TV gross interest rate remained at 39.78%. Other listed companies, such as Abison, Chau Ming technology, co - construction optoelectronics, Otto electronics, Lehman shares, etc., which are involved in the LED display business, have been equally pleased with their display performance this year. From this, we can see the rapid development of the small space LED display market. According to the data, the number of indoor LED displays using an average of LED per square meter from 60 thousand in 2015 to the next 2 years will gradually rise to 270 thousand. Under the same area, the number of upstream LED packages and chips will be increased by more than 3 times. It is predicted that in 2016, the consumption of small spacing LED will reach 29 billion particles. With the gradual development of Chinese mainland packaging materials, the cost will decline further and promote the development of the market. In 2021, the consumption of small space LED will reach 189 billion 800 million particles, and the annual growth rate will be as high as 46%. In addition, the outdoor display screen is also beginning to appear the trend of small spacing packaging, with the application of outdoor surface paste LED gradually overcome the damp proof, anti ultraviolet and other technical problems, outdoor display display high-definition, high density trend is gradually rising, the average distance from P10 to below P6, is also expected to be explosive growth. LEDinside estimates that the consumption of outdoor LED will grow from 93 billion 600 million in 2015 to 286 billion 400 million in 2021, with an annual growth rate of 20%. It is expected that 16 years of small distance between home and abroad can reach 141 billion 300 million, and grow at a compound growth rate of 28%, and there will still be nearly 39 billion new demand per year for 17-18 years. And according to the high LED data, the small distance LED is currently estimated to be around 70 billion, so the gap will still remain large in the future. Supply side: chip capacity expansion limited, packaging concentration significantly improved through UBS data show that the LED chip end of 2015 supply capacity of less than 92 thousand square inches, is expected to slightly increase in 2016, mainly through the 2015 industrial depth shuffle, only about 4000 LED enterprises in China withdrew from the market. Foreign LED chip manufacturers have reduced production, other continued expansion of production will be significantly suppressed, and China's implementation of supply side reform, the end of the chip subsidies to narrow the chip end of the expansion of capacity. From the supply side analysis 1: industry subsidies are narrowing, a significant reduction in LED chip production capacity disorder expansion in 13th Five-Year plans no longer the LED industry into the cultivation industry, upstream chip subsidies are gradually narrowing. The government level narrowing subsidies will inhibit the disorderly expansion of LED chip capacity from the source of the industry chain, and it is expected to transfer the subsidies to the LED lighting application side, which will pull the LED industry chain from the demand side. As a new industry for 09 years and the rapid development of the LED industry, government subsidies have played an important role in it. Public information shows that China began to subsidize the LED industry since 2009, with a large subsidy. In 2013, from the State Council to the local government, policies have been introduced to promote the LED industry. Statistics show that, as an example of the three an optoelectronic, as the LED industry "subsidized one brother", from 2010 to 2015, the amount of subsidies exceeded 3 billion yuan. In 2010, San an optoelectronic received more than 700 million yuan of government subsidies, accounting for 60% of the net profit in 2010, 86% in 2011, 60% in 2012, 45.7% in 2013, 50% in 2014 and 28% in 2015. According to people in the industry recently, after a round of shuffling, the government subsidies have changed: at present only those companies that can become the leading companies are subsidized, the patch has been narrowed, and some small and medium-sized enterprises are less likely to take subsidies. After the cancellation of the subsidy in 2015, the investment in the new production line of the enterprise increased greatly. The price of a single MOCVD could reach about 20 million yuan, and many enterprises would not be able to bear it. The narrowing of government subsidies means that the disordered capacity of the LED chip end and the package end is bound to be restrained. At the same time, if the future subsidy of LED lighting application is further subsidized, the supply and demand pattern of the LED industry is fundamentally improved, and the LED industry chain is expected to benefit the whole and further improve. With the narrowing of government subsidies, domestic LED chip enterprises reduce the impulse to expand production. According to statistics, as of 2015, the total installed capacity of the global MOCVD platform is about 3130, of which the total installed quantity of the mainland is 1473, accounting for 47% of the global total. The number of machines in the Taiwan area accounts for about 19% of the global total, about 15% in Japan and 13% in South Korea. After the LED industry shuffled in 2015, large chip manufacturers have adjusted their capacity to control the expansion plan. From the second half of last year, the output of crystal electricity and CREE was reduced by 25% (about 500 MOCVD, of which 450 produced blue light LED, and the other 50 were dominated by four yuan LED). At the same time, San an optoelectronic terminated 47 MOCVD purchasing contracts to German merchants at the beginning of the year. In May, crystal electricity was completely closed. There was no expansion plan for 2~3 years in the new century, and this year will not be added to the new machine. Since the cancellation of the subsidy in 2015, the investment in the new production line has become very large.