LED industry "shuffle tide" secret

The LED upstream, once heated by capital, is paying the price for the fanaticism. The data obtained shows that the LED industry is seriously oversupply in the upper reaches and the operating rate is less than 50%. Some industry analysts pointed out that it is expected that the LED upstream sector will still face the pressure of inventory next year, and shuffling is inevitable.

Production equipment is idle

Because local governments have the largest MOCVD subsidy for LED upstream equipment, investment in the upper reaches of LED has been the most overheated in recent years. "(LED upstream chip) from the supply shortage in 2009 to the basic balance of supply and demand in 2010, the oversupply in 2011, to 2012 has been a serious oversupply." Inspur Huan Optoelectronics Co., Ltd. General Manager Zheng Tiemin bluntly.

Confronted with a serious overcapacity is the price war. According to statistics, the price of LED upstream substrate and chip has fallen more than one-third over the beginning of the year, resulting in severely reduced upstream profits. On the one hand, there is a lack of demand. On the one hand, profits are meager, and many upstream companies choose to reduce production. Statistics show that nearly 50% of the entire LED upstream is idle.

In recent years, the Bundesliga Runda in the upper reaches of the LED industry has reported that only 38 of its 80 MOCVD plants are in mass production. In addition to another 5 units for R&D, 37 other units The machines are still in the process of installation and commissioning. The operating rate is only slightly higher than 50%.

"Shuffle" Tide

In an interview with a number of companies, they all said that the industry has not yet recovered, and the upstream market will remain in destocking next year, so prices will continue to fall. On the other hand, with overcapacity, the government's subsidies for purchasing equipment have begun to become cautious, and companies will really begin to kill at the market level.

In fact, the three quarterly reports of listed companies have revealed their clues. As the price of products continued to decline, Huacan Photoelectric three quarterly report shows that its revenue and net profit decreased by 25.7% and 49% respectively. In recent years, the Bundesliga's three quarterly report, which has been relying on subsidies to maintain the scenery, showed that its net profit fell by 57.41% in the first three quarters compared with the same period of last year. The company said in the report that the main reason for the decline was the company’s government subsidy ratio during the reporting period. Decrease in costs and increase in costs over the same period last year.

Zheng Tiemin believes that “it is foreseeable that shut-down, asset restructuring, mergers and acquisitions, and new projects will be launched in the next few years.” It is forecasted that there will be fewer than 30 companies remaining in the epitaxial chip companies next year, and the shuffling will continue to deepen.

Link: Upstream investment flows downstream

According to statistics, in 2011 the new LED industry plans to reach 195.4 billion, this year dropped sharply to 100 billion, a decrease of nearly 50% year-on-year. This shows that the industry is gradually becoming rational.

The data also shows that due to the excess production capacity upstream, the capital of the original upstream chip has shifted to downstream applications this year. The newly planned investment in epitaxial chips dropped from 46% last year to 10%, while the downstream applications have increased from 21% last year to 53%. Zhang Xiaofei said that the concentration of capital downstream will exacerbate the polarization in the downstream.

It is understood that since the beginning of this year, BDO Runda, which originally focused on epitaxial chips, has also been accelerating toward the application end. At the same time, mid-stream packaging companies including Hongli Optoelectronics are actively cutting into downstream applications. After more capital flows into the downstream, the original large-scale and excellent products will continue to expand, while small enterprises will rely on low-cost dumping strategies to obtain a portion of the market. “The most difficult thing is that companies with both scale and product levels are in the middle reaches. ".