Application market scale expansion LED companies

The stock market LED sector suddenly rose, the industry leader Sanan Optoelectronics yesterday's daily limit, 4 trading days rose 26.5%; the investment of 3 billion yuan into the LED Dehao Runda also closed at the daily limit. Analysts said that with the breakthrough of core technology fields such as luminous efficiency, the domestic LED scale is rapidly expanding, and the industrial chain is gradually opening up. LED is expected to develop significantly in the next two years.

Application broadening to change the industry landscape

"Time is value, the sooner it goes into production, the better it will be for the company's future development." Wang Dongming, deputy general manager of Dehao Runda, has been in a hurry. On December 16th, he just participated in the foundation of the 3 billion yuan LED project in Wuhu. On the 20th, he went to the opening of the Yangzhou project. This time was only two months after the disclosure of the company's additional issuance plan.

Wang Dongming introduced that the company's entry into LED is to take advantage of the huge market prospects and high gross profit margin of the industry. He said that considering the huge market share of applications, companies investing in LED applications are gradually increasing.

Mao Ping, a national electricity industry analyst at Shenyinwan, said, “The average gross profit margin of leading domestic packaging and application companies is 40%-50%, and the net profit margin is 20%-30%.”

With the breakthrough of LED luminous efficiency, the application range of the product has also been expanded. "A mobile phone screen requires about 10 LED devices, but a 42-inch LCD TV requires 1000 LEDs." According to Chen Gang, Xiangcai Securities, LEDs have improved their performance in addition to their application in the field of lighting. The penetration rate in the field of TV backlights.

Liu Liang, of Industrial Securities, said, “In 2010, global LED backlights are expected to grow rapidly. It is expected that TV demand will reach 30 billion, notebooks will need 6 billion, and mobile phones will need 7 billion.” This figure is higher than that of LCD in 2008. The 8 billion on the panel has increased fourfold.

It is precisely to see the prospects of the industry, all the funds have flocked to the LED. Sanan Optoelectronics has increased the MOCVD of upstream LED core equipment from 18 to 22, and the Tianjin project will add 20 more. Silan Micro plans to increase MOCVD from 6 units in 2010 and expand the production capacity of epitaxial wafers. Double; Dehao Runda plans to purchase about 30 MOCVD in the future.





Industry concentration will increase

At present, there are more than 60 LED epitaxial and chip companies in China, more than 1,000 LED packaging companies, and nearly 2,000 LED application companies. However, there are still very few companies that truly achieve upstream and downstream penetration. There are only a few companies with an annual output value of over 100 million yuan. In the context of the rapid expansion of the industry scale and the active layout of foreign manufacturers, the domestic industry is in urgent need of reshuffle.

Xiao Guowei, general manager of Microcrystalline Optoelectronics, said that among the top five LED manufacturers in the world, Lumileds and Cree are not satisfied with the monopoly of chips and epitaxial wafers, but through a series of acquisitions, from the upstream to the downstream of the industry chain and application development, and through The combination of patented products enhances the brand effect. “It is worth noting that companies such as Philips and Cree are actively expanding the Chinese market through equity participation and mergers and acquisitions of traditional lighting companies, and domestic companies will face greater competitive pressures.”

At the same time, industry consolidation helps reduce costs. "In the beginning, we did not want to directly make chips and epitaxial films. However, from the current development trend of the industry, we can master the high-end technology and open up the industrial chain to gain market voice." Wang Dongming introduced the electronics industry. The rule is to rapidly expand the market while reducing costs, and have the core technology to keep up with the changes in the market. "On the other hand, LEDs have high gross profit margins in the upper, middle and lower reaches. Realizing industry consolidation will help reduce company costs and enhance product competitiveness."

In addition, policy factors are also stimulating the industry to shuffle. According to reports, many government orders are more than 100 million yuan, and the short-listed manufacturers must have a sales scale of at least 50 million yuan, and have sufficient cash turnover capacity to withstand more than one year of deferred payment. "At present, there are only about 10 LED packaging or application companies with domestic revenues exceeding 100 million yuan. It is foreseeable that the future LED market and policy will be concentrated to leading manufacturers."

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