Discussion: China LED industry can be crazy how long

Backlight lighting market saturation is far from universal

"Chinese LED industry most what is missing? Not money, not machines, but engineers. In May 10th, [16.72 -0.71% shares Elec-Tech] chairman Wang Donglei said in Shanghai, China enterprises around the world around looking for people, rob "will open the engineer", to pay a "double double" price again. He is to participate in the world's second largest LED equipment provider Veeco training center landing ceremony. He was listed as the first to speak on behalf of the enterprise, he praised Veeco timely assistance. Veeco global CEO PeELer in Taiwan have not satisfied.

Peeler proud of reason, Veeco last year in China earned money. He told the first financial daily said that in 2010, 30% of the company's revenue from China, in 2011 accounted for more than half. This is the reason why the company is eager to set up a training center, the customer bought the equipment, but the lack of skilled engineers.

This is Chinese LED industry for more than a year under the crazy layout in the latest scene. But how long can a good life last?

Crazy LED

Veeco Wang Donglei as the first to speak on behalf of the enterprise is obviously big customer effect. Before the ceremony, Veeco China President Wang Keyang revealed to the newspaper, in 2011, China's LED market is still very active, the first few companies have been under the MOCVD orders, which bought a lot of a lot of". But he declined to disclose which companies.

However, Wang Donglei told reporters after the ceremony next to a LED sources, 2011, Elec-Tech booked the Veeco 100 Mocvd.

What it means? In 2010, Veeco Mocvd equipment shipments of approximately more than and 300 units, if this year still maintain last year's situation, to say a Elec-Tech eat its near 1/3 capacity. In July 2010, Veeco and Aixtron had to Elec-Tech Germany ordered 100 taiwan.

And local LED epitaxial chip giant three optical [41.18 0.32% shares] internal data show that it plans to complete 107 units of Mocvd in 2011 before the end of the expansion task.

Is more crazy than they. Two months ago, the parent company of Hongkong announced GCL GCL holdings in Zhangjiagang, a $2 billion 500 million investment, the construction of LED industry base, the first phase will purchase 100 sets of Mocvd, 170 sets of sapphire crystal growth furnace, then it will purchase 400 sets of Mocvd equipment.

A Mocvd device about nearly $3 million. GCL-Poly only Mocvd equipment purchases of up to $1 billion 500 million. "It's said that the goal was 600, it was crazy. "A senior analyst with the GCL revealed.

The newspaper was informed that due to fierce competition for procurement, GCL began to try through the vertical integration of equipment enterprises, to strengthen the status of the industry. Not long ago, it takes about $50 million in shares of Shanghai semiconductor, replace Walden to become a major shareholder, trying to integrate micro's first two main business equipment Mocvd. China is the only one in the mainland and Taiwan, Taiwan, TSMC and other foundry giant equipment supplier. A few days ago, in the newspaper insiders confirmed this.

This battle led to some small LED wafer producers temporarily unable to get more equipment. The day before yesterday, the reporter met Ying Rui photoelectric chairman Zhang Rujing. He said the company has just moved into 2 Mocvd equipment, production is expected to mass.

Battle let Veeco, Aixtron enjoy the dividend growth. Veeco in the first quarter of this year, the results show that due to insufficient capacity, the period of delivery orders amounted to $530 million, while its 2011 revenue target was $more than 1 billion. In fact, since 2010, the backlog of orders per quarter are almost $500 million or more. Its single quarter revenue growth rate has exceeded 200%.

Capacity will enter a period of adjustment

"We expected from 2011 to 2015, global about more than 5 thousand sets of Mocvd equipment. Peeler said that in 2011, the Chinese market shipments from 850 to 1100 units.

But really a good day so continue? Crazy layout seems to imply some irrational factors.

Before the newspaper reported, China contributed to two years the layout of the power of flocking and equipment subsidies, it even accounted for 40% to 60% of the cost.

As of early March, three optical get Mocvd equipment subsidies has reached a total of 585 million yuan, more than half of its total revenue in 2010.

But Yangzhou official told this newspaper revealed that the subsidy policy in July 1st this year will be cancelled. The other city is not clear, but no more than half a year of competition policy.

And subsidy policy if the cancellation will have a direct impact on the enterprise? Wang Donglei is not willing to answer, this is to ask the government. He said.

In this regard, Zhang Rujing cautioned that each city issued preferential policies may not be a cycle.

Veeco is hard to ignore this message. Wang Keyang said, has heard from the manufacturers will continue to support the form of interest free loans. Peeler simply admitted, will affect the shipment, but will not affect the company's market share.

Peeler that Chinese LED industry benefited from the explosive growth of industrial transfer, before South Korea ahead of the second quarter of 2010, but after some saturation, based on China before subsidies is not good, as a "a pair of illness". But South Korea's growth slowed, this implies the embarrassment of saturation of the global application market. Up to now, LED chip is mainly used for notebook and television, the former has penetrated the vast majority, which has more than 50%, IT field has been driven by the growth of some fatigue.

"China LED industry upstream development, should beware of structural capacity