LED chip supply is in short supply, industry expansion will surge again
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As an important part of the upstream of the LED industry chain, LED chips have always played a leading role in the development of the industry. Leading the whole body, LED chip technology upgrades, rising costs, capacity shortages and other phenomena are all implicated in every LED manufacturer in the middle and lower reaches. As an important part of the upstream of the LED industry chain, LED chips have always played a leading role in the development of the industry. Leading the whole body, LED chip technology upgrades, rising costs, capacity shortages and other phenomena are all implicated in every LED manufacturer in the middle and lower reaches. At present, the overall performance of the LED chip industry is improving, especially in terms of supply and demand balance, the application market continues to expand, and the expansion of production by leading enterprises is naturally a matter of course. However, the trend of industry concentration and elimination of tides has intensified, and it will be difficult for enterprises to win the terminal market. Data analysis of China's LED chip market In recent years, LED chip market size, output value and number of companies have maintained a growth trend. According to statistics, in 2016, the global LED chip market reached 44.8 billion yuan, an increase of 7.88%; the size of China's LED chip market exceeded 14.5 billion yuan, an increase of 11.54%. In 2017, with the arrival of the fourth quarter, the LED chip market is expanding. It is estimated that the global LED chip market will increase to 51 billion yuan, up 13.8% year-on-year; the capacity of China's LED chip companies will continue to expand, and the LED chip market is expected in 2017. It is about 18.9 billion yuan, with a growth rate of 30%, which will account for 54% of the global LED chip production capacity. The expansion of China's LED chip market and the increase in the proportion of global production capacity are not unexpected. In the LED application industry's downstream LED lighting and LED display, LED chip manufacturers' technology upgrades make LED lighting products have better light efficiency. It also meets the higher quality chip requirements for LED small pitch displays. Moreover, the LED chip is the core of LED lighting and LED display, and it accounts for the highest proportion of cost. According to industry insiders, LED chips account for 18% of the cost of general lighting products, accounting for up to 70% of LED display products. In addition, the increase in overseas orders has also led to the expansion of China's LED chip market indefinitely, and the output value and global market share have increased significantly. Under the ever-expanding market scale, the global LED chip production value will also double. According to the data collection, the annual growth rate of global LED chip production will reach 8% from 2017 to 2020, and the global LED chip production value will exceed 8 billion US dollars by 2020. It can be expected that the global LED chip products will usher in a larger development peak in the next three years. The leading enterprises have taken the lead in expanding production and increasing revenues. The development trend of LED chips can be seen. The price changes in the industry have never stopped. The price increase, expansion and revenue increase are the main melody of the industry today. From the early high profits and sharp profits, the price increase and raw material prices of the midstream packaging manufacturers have boosted the price of upstream LED chip companies in the past two years, prompting the whole industry to enter a benign price. LED chip faucet Businesses are profitable. Recently, domestic LED chip leading companies have disclosed the results of the first three quarters of 2017. The announcement shows that Sanan Optoelectronics revenue was 6.283 billion yuan, up 40% year-on-year; Ganzhao photoelectric revenue was 807 million yuan, up 3.55% year-on-year; Hua Can Photoelectric revenue was 187 million yuan, a year-on-year increase of 74.78%. Its performance growth was mainly due to the strong demand for LEDs, the expansion of the company's production scale, and the sharp increase in production and sales. Among them, Sanan Optoelectronics continues to lead in performance revenue. With the advancement of LED chip production and processing technology and the improvement of product quality, the LED chip industry will accelerate the formation of a concentrated trend. The situation of the leading enterprise, Evergrande, is obvious. If SMEs do not pay attention to product quality and technological innovation, they will be promoted by the times. Will go to extinction. At that time, leading LED chip companies will dominate the market. The market Red Sea has already formed, LED chip companies will certainly not sit still, adjusting their industrial structure and accelerating market layout are the main strategies of many LED chip companies. For example, on October 22, Huacan Optoelectronics announced that it plans to build Huacan Optoelectronics (Suzhou) Co., Ltd. LED epitaxial wafer and chip four-phase project in Zhangjiagang Economic and Technological Development Zone. The project is expected to have a total investment of 2.5 billion yuan, which will form an annual LED. The production scale of 9 million pieces of epitaxial wafers and LED chips of different specifications. LED chip makers such as Sanan, Ganzhao Optoelectronics and Aoyang Shunchang are all expanding their production plans. In addition, OSRAM's LED chip factory in Malaysia is about to be completed. The plant covers an area of ​​100,000 square meters and has an excellent location. When the plant is completed, it will become the world's largest and most modern 6-inch wafer LED chip. Production base. It is foreseeable that the expansion of LED chip capacity will become the main tone in the next few years, industry competition will become more severe, and the survival of SMEs will be more difficult. The demand is greater than how the supply company wins in the competition. It is not difficult to see that the large-scale expansion of LED chip companies and the expansion of chip extension business are mainly based on the current market supply and demand relationship. An authoritative organization predicts that the global application market will grow at a compound annual growth rate of 8%. As the cost evolves, the number of chips that can be cut by a single epitaxial wafer increases. According to the annual average light efficiency increase of about 10%, the number of chips that can be cut increases by 1.1 times, and the market is increasing in large quantities. However, the supply side failed to keep up with the rhythm of the market, the low-end production capacity of the industry was gradually phased out, the backward equipment could not meet the production demand, and the demand side and the supply end generated a huge gap. However, not every LED chip company can break free from the torrent of low-end manufacturing. Once the equipment is updated, it requires great technical support and capital injection. Second, corporate brand and industry influence require a lot of energy and cost. . This may be a period of transition for a large-scale enterprise that has already formed a brand influence. However, for many small and medium-sized enterprises in the industry, the increasing competitive pressure of the industry has already overwhelmed the enterprise. Nowadays, the concentration of industry is so strong, the technological innovation is very difficult, the market is difficult to expand, and the suppression of large-scale enterprise brands has accelerated the elimination speed of SMEs. If the enterprise does not innovate, there is no development. Throughout the ages, only companies that keep pace with the times and focus on innovation can survive for a long time and become global famous brands. The same is true for LED chip companies. Regardless of size, business strategy and development direction, a company determines whether a company has the potential for success. The dual inflow of technology and capital can enable the company to enter a positive development. Therefore, whether LED chip companies can win in the market red sea lies in the business strategy and development direction of the company.