LED boom high localization is the trend

Taiwan media reported on the 21 United Evening News, morning came, the Ministry of Commerce to check monopoly, intends to transfer the tariff increase LED plant, increase from the current 4% to 10%. Affected by this negative impact, the 21 day of the Department of the LED plant fell overall market, while the mainland LED plate rose.

Customs rumors still need to be further verified, there is no official accurate information. Prior to the meeting of the CPPCC National Committee Chairman Yu Zhengsheng met with the Taiwan Industrial Association, the mainland economic and trade delegation, said the line, Beijing in many places in the mainland has a super national treatment, which should be gradually canceled. Then a series of recent antitrust events as well as the country's strong support for the attitude of the semiconductor industry, LED industry is likely to become the official support direction. If the future tariff really improve, the move will further restrict the import of foreign and LED products in Taiwan, Taiwan enterprises have a significant impact, to a greater extent to protect domestic LED enterprises.

Tariff rumors only trigger factors, localization trend has long been determined. No matter whether the future tariff rumors have been confirmed or falsified, we do not think the impact of the LED industry investment logic. LED industrial chain to the mainland has been the trend of the times, irreversible. First of all, the overall competitiveness of mainland enterprises LED beyond the trend of Taiwan enterprises have been formed, which is more than a simple policy support more determined, more long-term. From the capital, technology, talent, market considerations, Taiwan enterprises are gradually losing advantage. The future of mainland LED companies to replace the trend of Taiwan enterprises. LED also belongs to the electronic manufacturing industry, focusing on process innovation, cost control, scale effect and rapid response. Mainland enterprises instead of the counterparts in Taiwan there are several favorable factors: 1 labor costs: the average wage of domestic technical personnel and management personnel, base is much lower than that of dry, plenty of college graduates so that the domestic LED enterprises in the future can continue to enjoy the "bonus engineer". 2 industrial clusters and a wide range of domestic demand market: China's LED industry cluster has been formed, with the most extensive lighting market demand, focusing on most of the global packaging capacity, enterprises have a rapid response to the service advantage. 3 valuation differences: in the past few years, the domestic market for the electronics industry in the two PE high capacity expansion of domestic electronics companies to provide adequate and low-cost financial support, but also for the industry to provide the conditions for mergers and acquisitions integration. 4 management differences: the domestic LED enterprise management generally in the full vigour of life enterprising, enthusiasm, more struggle.

The most promising alternative to domestic chip and backlight link. In the field of LED chip, Taiwan enterprises EPISTAR, canyuan, new century city share is still high, occupy the major market share, with three, Huacan etc., the enterprise product quality and price promotion, the future of Taiwan enterprises represent the general trend to replace. Large backlight areas, Taiwan enterprises also occupy a major market share, but the competitiveness of mainland enterprises in the growing.

LED boom, optimistic about the long-term market LED plate. From a global perspective, LED industry continues to boom stride forward singing militant songs in the 14 year high. Whether it is like PHILPS, OSRAM and other international lighting giant, or South Korea, Taiwan and other places LED industry chain enterprises are optimistic about the outbreak of the LED lighting market, increasing investment. LED market boom depends mainly on three aspects, the first is to stabilize the backlight market, then start a large-scale public, commercial lighting, followed by a rapid increase in penetration of home lighting, but these three conditions have been in the current view. We believe that this round of LED industry boom will rise throughout the year, and even extended to the next two or three years, LED home lighting penetration continued to improve. We believe that the 14 year led will be throughout the year in the market, in the light volume, rapid growth in the context of demand, many companies will usher in revenue and profit margins and a double inflection point. From the investigation of the industry chain, this year, many led companies have mergers and acquisitions and refinancing needs, due to the two or three line led corporate profit base is generally not high, so the corresponding performance elasticity is very large.

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