Market explosion point, the high economy throughout the LED industry

LED boom high will continue, the golden time to usher in the layout of the short-term callback. From a historical point of view, as the world's largest single LCD TV market, the mainland market volatility on the LCD TV industry greater impact. Before the Spring Festival and 51 TV consumption peak, upstream components industry will be cyclical boom. In addition, the Christmas season in Europe and the United States is also at the end of the year, leading to the emergence of the backlight stocking season generally in the end of the three quarter and the first quarter. However, due to a few years ago did not keep up with the lighting demand, the overall growth of the backlight is not enough, leading to the trend of the LED plate also appeared a certain cyclical characteristics.

From the stock price trend, LED plate market generally has a pulse characteristics, the industry boom in the short term, the continuous rise, and then slow down. LED plate recent continuous decline, investors have some concerns about the industry outlook, the industry as a whole is expected to rise after the downturn will be like in previous years. But we have already pointed out that in the past the cyclical nature of the plate is mainly due to the seasonal fluctuations in the backlight market, and from the beginning of this year, the industry has been the source of the general prosperity of the general lighting market. Affected by the upstream chip technology and the rapid decline in prices, the price gap between LED lighting and traditional lighting products are gradually reduced, the downstream LED lighting products have been shown price advantage. With the future LED lighting penetration continues to improve, the industry boom has a solid support.

Study of Taiwan LED industry company statistics we can circle, Dingyuan, Taigu, EPISTAR, Guang Lei, Addison, new century photoelectric 7 LED chip manufacturers, and Baihong East Bay, Huaxing, Li Zhou, Lunda, I-Chiun, Everlight, Addison and other 8 LED and downstream packaging factory according to the quotient. 14 years from to April, the overall LED industry chain revenues totaled NT $36 billion 249 million, an increase of 20.81%. Over the years of LED industry chain revenue growth, so high revenue growth only appeared in 10 years, but 10 years is because of the financial crisis, dug a pit, and this year is the natural start-up industry demand, meaning cannot be mention in the same breath.

LED to enter the traditional peak season, chip and packaging manufacturers operating rate have stayed high, average order visibility 1~2 months. But there is a certain increase in the income of the Taiwan industry chain does not increase the phenomenon, the growth of various LED vendors revenue growth, profit space is limited, the manufacturer for the need to expand production should generally hold a conservative wait-and-see attitude.

Recent Taiwan LED industry chain also appeared a certain callback, affecting the confidence of some investors. We would like to point out that the current trend of LED industry to the mainland clear, the trend of market share to the first tier companies are also very clear. Even if the LED industry boom is high, the industry will also be a large internal differentiation. First of all, in the field of chips, with the continuous improvement of the mainland chip manufacturers technology, the overall performance of the power chip and the gap between the Taiwan manufacturers continue to narrow, more and more packaging manufacturers gradually accept the Chinese chip manufacturers. According to LEDinside statistics, from a quantitative point of view, China's chip market share is expected to reach 8.

However, the market price is still China chip manufacturers and chip manufacturers in Taiwan prices are still gaps, and the price of domestic chip rate is higher than Taiwan Jingyuan price drop speed. Therefore, from the revenue scale, 2013 Chinese local manufacturers market share of only 68.4%, compared with last year rose slightly, the total revenue of 6 billion 200 million yuan, an increase of 17%; Taiwan manufacturers market share of 28.4%, declined slightly compared with last year, the total revenue of 2 billion 600 million yuan, an increase of 10%. From the enterprise share, only to see Chinese local manufacturers, the mainland accounted for the proportion of an optoelectronic chip manufacturer's total revenue of more than 4; only Taiwan manufacturers, Taiwan imported chips EPISTAR accounted for the proportion of the total revenue of close to 8. LED chip manufacturers are still difficult to improve profitability, many small manufacturers forced financial pressure, the customer is difficult to maintain, technology is also difficult to upgrade, some manufacturers have been withdrawn from the chip market. With three as the representative of the large manufacturers, is currently actively preparing for the expansion plan. With the development of the industry, we believe that China's LED chip market will further enhance the degree of concentration.

Packaging industry trends similar to that in the beginning of 2010, in the upstream industry, the rapid expansion of production capacity and the downstream application market continues to expand under the dual factors, China's domestic LED packaging manufacturers ushered in a period of rapid development. Our success among the Chinese market share package before five, become the local leading manufacturers China package 2010-2013, LED device revenue CAGR of 53% for the most rapid development for manufacturers. Other major manufacturers Ruifeng optoelectronics, poly fly optoelectronics, rectangular composite growth rate over the next year are more than 3. The huge demand for downstream applications provides the basis for the rapid development of domestic packaging manufacturers. 2013 China LED market size of $7 billion 200 million, an annual growth of 20%. China is a big country in the production of LED applications, with the rapid increase in LED lighting penetration, the increasing demand for LED devices, China has become the world's major market competition LED packaging manufacturers. Before 2013 five Chinese city accounted for the highest rate of manufacturers were Nichia, Everlight, CREE, Linsen and PHILPS, together accounted for about 1/3 of the overall market.

We believe that the 14 year LED throughout the year in the market, in the light volume, rapid growth in the context of demand, many companies will usher in a double turning point of revenue and profit margins. 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. From the beginning of the stock price increase, A shares to three