GCL photoelectric $2 billion 500 million LED project construction investment hot brakes

Lasted more than two years, led investment boom has finally started the brakes.

Yesterday, Zhangjiagang Economic Development Zone Investment Promotion Bureau of the person in charge told reporters that in March this year to start the construction of GCL photoelectric Zhangjiagang LED epitaxial chip project has been stopped, turned to the reconstruction of the solar photovoltaic project. The Zhangjiagang development and Reform Commission official also confirmed the news, and said the company's core technology team has also been in place on the dissolution. Around Zhangjiagang several LED extension manufacturers also confirmed that his company has from the GCL photoelectric "poach" parts of the technical staff there.

Relevant personage GCL photoelectric investment company said that the current progress of company LED project is not a public statement, did not disclose more information.

"The procurement of MOCVD devices can produce LED epitaxial wafers, can also be used to produce gallium arsenide solar cell epitaxial wafer, so that the whole project is not stopped, but lowered the size of the original. Above Zhangjiagang Economic Development Zone merchants Bureau revealed.

Once known as the $2 billion 500 million investment, purchase 500 sets of MOCVD equipment GCL photoelectric LED project, after only 7 months of sudden misfortune. And this project was a landmark event will LED investment to climax. But the stage of serious overheating investment, has led to excess capacity LED chip.

Overheating investment overcapacity

It is reported that the GCL group is one of the large foreign enterprises operating power, GCL photoelectric is one of three of its business.

In February this year, GCL Group Chairman Zhu Gongshan announced that the total planned investment of $2 billion 500 million contract settled GCL photoelectric LED industry base in Zhangjiagang Economic Development Zone, the planning of MOCVD equipment procurement amounted to 500 units. In March 1st, Zhangjiagang Xin photoelectric LED base officially started. Subsequently, the staff also Xin photoelectric appeared in high-profile industry.

GCL photoelectric apparatus on MOCVD big time has become a hot topic in the LED industry, and the domestic LED investment to the climax.

Industry data show that this year, 1~7 months, China's MOCVD increased by more than 200 units, is expected in 2012 China's LED chip production capacity will reach 10 times in 2010. At present, China's MOCVD equipment has reached 543 units, counted in the construction of the 96 projects, the number of Chinese MOCVD will reach 1642 units.

The main reason for the sharp increase in the number of MOCVD equipment is that the local government introduced preferential policies - each MOCVD subsidy 8 million yuan ~1000 million, as well as local municipal lighting orders. Zhan Yiren, Secretary General of Taiwan optoelectronic semiconductor industry association, also said that the main reason for the relocation of enterprises in the upper reaches of the LED Taiwan to the mainland, but also because of local government subsidies and orders.

This year, LED capacity expansion rate is too fast, from the lower reaches of the manufacturers to get the goods have been clearly felt. "Sanan Optoelectronics (600703.SH) sources, last year three optical downstream customers getting goods to be expected to line up, order, wait a long time to get the goods, but this year the downstream customers can get the goods at any time to come. The reason is because on the one hand, Sanan optoelectronics LED capacity expansion, on the other hand, LED downstream market demand is not as rapid growth.

Downstream sudden cooling

Based on this, de Ho Runda (002005.SZ) relevant responsible person also said that the company is to the arrival of the MOCVD debugging has been wildly beating gongs and drums, but in the existing group of MOCVD was not successful debugging before, is not to play money to buy MOCVD equipment manufacturers.

This situation in a year ago did not dare to imagine, when the domestic LED manufacturers is almost pre play, in order to VEECO and AIXTRON can be shipped in advance.

But LED downstream application market in just one year on the wind to the next. Because of diminishing the debt crisis and Chinese home appliances and other stimulus policy effect, LED market is the largest driving LED TV market, this year's growth has come to a halt, and by the LED industry as LED lighting market with the most growth potential, has yet to start.

Taiwan Research Institute Digitimes survey report shows that South Korea LED capacity utilization of less than 50%, leading to the South Korean LG and Samsung suspended the purchase of MOCVD equipment.

Ruifeng photoelectric general manager Gong Weibin pointed out that due to the rapid weakening of the pull of LED TV, MOCVD devices to expand the production capacity of the LED chip, will cause the next two years, LED chip prices fell by 30%~50%. Sanan optoelectronics, BDO Runda, nationstar, Silan and Lehman photoelectric first half earnings report also showed that the LED chip or package the product gross margin fell by more than 8.29 percentage points, the highest drop of 13.31 percentage points.

Gong Weibin pointed out that this is just the beginning of the domestic LED industry adjustment period, if the current layout of the domestic MOCVD reached 50%, the real kill will begin.

LED industry sudden price war, apparently did not expect LED investors, now the best approach, natural and GCL photoelectric, either suspended or slow.

There is no LED manufacturers to unsubscribe MOCVD equipment. AIXTRON China market, the official said, LED chip manufacturers have slowed down some of the process, part of the purchase of MOCVD equipment has been postponed. AIXTRON also lowered earnings expectations in September 15th, the company's operating income of $600 million in ~6.5 between $, less than the company previously estimated $800 million ~9.0. In addition, AIXTRON will also previously announced backlog orders data down 100 million euros.

Veeco CEO John R. PeELer also said publicly that the order will be affected by the LED industry terminal market in the recent downturn in the short term