LED patent protection faces investment decision analysis
This week, another company announced its entry into the LED industry: Zhengtong Electronics announced on the 16th that the company will invest 20 million yuan into LED chip packaging and downstream applications such as LED lighting.
From next year, a batch of core LED patents will continue to spend 20 years of patent protection period. Both enterprises and capital market investors are eager to try the LED industry. With the gradual opening up of wider downstream applications, the LED market will see explosive growth in the future.
Patent construction barriers
The LED industry is a high barrier to entry. It refers to upstream chips and epitaxial wafers, which currently account for 70% of the industry's output.
It is much more difficult to do LED chips and epitaxial wafers than to simply package and make downstream applications. This involves many aspects of technology and technology. Some industry analysts said, "Others don't say that the sapphire used for the substrate is only harder than diamonds, and the processing is very demanding."
Another raw material for making substrates, silicon carbide, is more "harsh", the price is higher than sapphire and it is prone to cracking, failure of luminous efficiency, poor reliability, etc., so the performance of the LED chip is better. Sapphire, but the current mainstream is the latter.
Even if you walk through the substrate, "the problem of epitaxial wafer growth and chip manufacturing is still awkward," said the analyst. Different substrate materials will use different epitaxial growth techniques and continue into subsequent chip processing and packaging. In addition to the process requirements, optical technology must pay attention to luminous efficiency, lower junction temperature and heat dissipation.
It is precisely because of this that the formation of LED patent barriers. At present, the global LED market is controlled by the top 5 manufacturers in the industry, namely Nichia, Toyoda Gosei, Cree, Philips Lumileds and Osram. In order to maintain their competitive advantage and maintain their market share, these five companies have applied for a number of patents, covering almost the entire industrial chain including raw materials, equipment, packaging and applications. The development and production of LED manufacturers through patent authorization and cross-licensing not only hinders the emergence of new entrants, but also increases the production costs of enterprises to some extent.
The opportunity expires to promote the pattern change
However, the barriers to this patent have already shown signs of loosening. Zibo, director of the National Semiconductor Lighting Engineering R&D and Industry Alliance Office, told reporters that "in the next two to three years, a group of core patents in the 1990s will expire."
For the industry, this may be an opportunity for the current pattern to change. Because the LED-related patents that have been proposed since 1990 will gradually reach the effective patent term of 20 years from 2010, a significant part of this involves important white LEDs.
The weakening of foreign patent holders will stimulate the emergence of a large number of new entrants from two levels. On the one hand, the opening of new markets, the patents owned by Nichia Chemical have hindered the entry of LED products from Taiwan into the Japanese market; and if they move to the United States, there is a considerable possibility of infringement of Cree’s patents, currently at home and abroad. The legal disputes also originated here.
On the other hand, Li Zhizhong, a researcher at Datong Securities, believes that “the expiration of patents can expect a decline in LED costs.†He said that coupled with the new competitive push and technological advancement of manufacturers, LED products have replaced large-scale traditional products in the most important lighting market. The pace of the light source will be accelerated.
What is expected of this is not only the industry players, but also investors. In Lianchuang Optoelectronics and Feile Audio stocks, we have already posted a message saying that we are optimistic about the development prospects of the two companies after the expiration of the patent next year.
The industry is on the eve of explosive growth
There is no doubt that with the patent “lifting the banâ€, the LED market will heat up further. How high is the industry's prosperity?
Globally, LED manufacturers have launched expansion plans this year. Sanan Optoelectronics has expanded 18 MOCVD equipment to 33 units this year. However, the expansion of Sanan is completely "small" compared with the Korean Samsung LED. "The latter plans to add 70 devices in one breath this year!" This move led to the full capacity of MOCVD manufacturer Aixtron Germany and raised its full-year performance forecast.
The confidence of manufacturers comes from the huge market demand of LED. China Investment Securities Electronics Industry Wang Haijun said that the potential demand for the global LED industry is expected to be 229.7 billion next year, while the annual supply of the two MOCVD equipment plants is only 180 units, corresponding to an annual production capacity of 58 billion, far from meeting the demand. . In September this year, Sanan Optoelectronics held a new product launch conference, the message was that the current supply and demand in the industry is tight, and the production capacity has become the bottleneck of Sanan Optoelectronics. There are some “micro-words†for downstream packaging companies to supply the company.
Haichun Securities analyst Xue Chuncheng, who has been closely tracking Sanan Optoelectronics, said that the current industry boom is at least until 2010, and there is still room for growth in the downstream application market. The industry is still in the early stage of development. He pointed out that the mature applications of mobile phones, decoration, lighting, etc. have been updated, and the demand for medium-sized backlights continues to grow. The demand for large-size backlight applications has only just begun this year. In addition, there are government-level outdoor lighting. Promote home lighting for the final and largest application markets.
For the specific time of the industry outbreak, China's LED industry development pioneer Xiamen City LED Promotion Center, the owner of any opening, said that home lighting is expected to start in three years, he is currently the most optimistic about the large-size backlight source city Sanan Optoelectronics The point is that less than 3% of TVs currently use LED backlights; if LED TV penetration reaches 15%, even the current global capacity is not enough.
Research institute LEDinside data shows that Samsung, LG and other manufacturers currently announced that the LED TV sales target for 2010 is close to 14 million units. Together with Japanese and Chinese brands, the total sales volume is expected to be 15 million units, more than five times this year. With an average LED TV demand for LEDs of 1,000, next year, only 15 billion LED chips will be needed for TV. China's Taiwanese company Jingdian has supplied Samsung LED TVs this year. The monthly revenue has risen from less than 500 million yuan before Samsung's large-scale distribution to 1.48 billion yuan in August.
According to China's "Semiconductor Lighting Energy-Saving Industry Development Opinions", the penetration rate of LED products in functional lighting, LCD backlight, landscape decoration and other markets will reach 20%, 50% and 70% respectively by 2015.
Investment still needs to be cautious
Although the industry's development prospects are quite good, the industry also reminds investors not to invest blindly. Zibo repeatedly stressed that Chinese enterprises still need to strengthen technology research and development, "you must have your own core technology."
He Kailu said that the high cost of LED products has many reasons. It cannot over-exaggerate the role of patent opening in the industry. It is not that the industry will develop once the patent expires.
He Kailu said that in order to solve the cost problem in the future, it is still driven by technological progress, so companies with technological advantages will seize the market commanding heights.
On the other hand, He Kailu also mentioned that the current industry is over-investment, the industry is not competitive, and the future product prices are falling, and the trend of corporate profit space compression can be foreseen. Under this circumstance, only companies with real technical strength can produce high value-added products, which will be more advantageous in terms of production efficiency and product performance.
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