Focus on investment opportunities LED policy brings warm

The afternoon of February 21st, in the "12th Five-Year Festival" green lighting demonstration project reform conference, director of Chinese ring Committee He Xuemin said Chinese ring committee will be in the "12th Five-Year 8 billion" period for the central budget funds to purchase 4 million LED light, road lighting products; Chinese Electronics Import and Export Corporation announced on February 27th, China open tender on 2012 financial subsidies to promote LED lighting products. With the introduction of LED related policy subsidies, LED eye-catching performance of the entire sector, last week, the overall LED index rose 4.82%, more than the electronic sector of the plate, CSI 300 of 0.18%.

From 2011 to the end of the second quarter has faced the whole industry from the beginning of 2011 fully loaded pile up in excess of requirement, the rate continued to decline in the use of LED upstream epitaxial plant capacity, the major of sapphire substrate inventory from 1.5 month price highs, to about 2 weeks of preparation, LED display industry from upstream to sea enveloped in poor overall demand under the condition of. The whole LED industry product price, not only the sapphire substrate decline, downstream of the TV package, middle grain prices jointly and severally affected, in the fourth quarter of 2011, affected by the weak terminal products demand for manufacturers to clear inventory, LED chip small power single quarter fell more than 10%. Last year the LED backlight market bleak plus lighting does not start, the LED industry supply and demand drop of 30%, pile up in excess of requirement, but with the backlight and lighting market demand pick up, is expected in 2012 LED industry boom will rebound, manufacturers expected improvement, according to the NPD Display Search released the latest LED market quarterly forecast, in 2012 a quarter of LED excess supply and demand ratio 19%, the two quarter is expected to decline to 16%.

LED after 2011 overcapacity, competition, prices fell sharply, the effect of energy saving and cost has obvious market competitiveness, and this policy power, LED general lighting is expected to fully activate the permeability increased significantly. But with the rising of LED general lighting market driven by costs continued to decline and encouraging policies, more lighting manufacturers will be targeting this market, the first step in this direction is to improve the degree of vertical integration, the majority of lighting manufacturers are outsourcing LED chip / package business, in terms of gross margin or product portfolio the flexibility of view is unfavorable. However, the lighting manufacturer or the acquisition or the creation of its own LED packaging capacity, integrated packaging may become an important driving force for the lighting company entered the LED market. In addition, we propose to focus on chip manufacturers and downstream LED application vendors.