Rising penetration of domestic LED chip ushered in the era of price war

Domestic companies want to be able to use 1~2 years, so that the current LED chip light-emitting efficiency and then improve the 30%~50%, luminous brightness of 200lm or more.

Domestic LED chip permeability increase

Domestic chip manufacturers in the market by virtue of a higher cost of a step by step to enhance the acceptance of the domestic chip packaging factory.

From 2009 onwards, by the strong support of local government policies and the huge display, backlight and lighting market to promote the rapid development of China's LED epitaxial chip industry. The number of main production equipment MOCVD machine rapid growth, from 130 in 2009 jumped to the end of 2012 by the end of the 917 units.

2013, due to the rapid development of the lighting market, driving the LED industry, the middle and lower reaches of production capacity, to a certain extent, slowed the phenomenon of excess capacity since the second half of 2011, the industry began to pick up. Upstream epitaxial chip capacity utilization also increased from less than 30% in 2012 to the current average of nearly 60%. The market, because the next few years the backlight market gradually saturated, demand will show a steady growth, the market over the next growth will come from the lighting market. Since the beginning of 2011, the domestic lighting market began to gradually rise, and by 2013, lighting market demand began to grow significantly. Expected in the next few years, the lighting market will become the upstream epitaxial chip manufacturers benefit from the largest market segments.

In the lighting market can be expected in the environment, domestic chip manufacturers have through continuous introduction of technology, talent and increase R & D investment, so that the chip manufacturing technology level has increased significantly, and in the market with a higher price step by step to enhance the packaging factory for domestic chip acceptance, from taking more and more market share. For example, in the field of indoor lighting and commercial lighting, domestic chip replacement speed is very fast. Recently, the domestic packaging plant responsible person said: the past two years, many large companies do not specify who chips, as long as the chip quality is acceptable. I remember three or four years ago, 80% of the chips are purchased in Taiwan, China or foreign brands, and now buy chips, the mainland are beginning to buy chips 90%. And even the emergence of a customer's initiative to use a brand of mainland china.

The phenomenon of "increment does not increase profits"

Steady growth in demand for equipment market this year, but the price continued to decline, resulting in a significant increase in overall sales of equipment.

Benefit from the overall recovery of the global economy as well as the terminal lighting market pull, the first three quarters of 2013, the overall operating situation of the domestic LED industry compared with the same period last year significantly improved. However, due to the decline in the downstream application market prices and the impact of the current situation of the industry competition intensified, the upstream chip manufacturers but fell into the gross margin decline - income does not increase profits embarrassing dilemma. Analysis of the reasons, the upstream chip prices stumble endlessly, mainly due to a surge in investment in the past few years led to the rapid expansion of production capacity, and the market temporarily unable to fully digest caused. Oversupply caused by high inventory is the fundamental reason for the sharp decline in chip prices. Given the market price pressures, manufacturers have to sell at a lower price to the previous high cost of the chip, thus affecting the gross margin level of the enterprise, eventually leading to increase income does not increase". Not only is the upstream of the core segment, even the profit is not profit phenomenon is also in the downstream lighting and more upstream equipment industry spread. To the North microelectronics company, for example, although the overall stability of the market demand for equipment, the company's equipment sales growth faster, but due to the continued decline in prices, resulting in overall sales of equipment and the same period last year.

"Oversupply", "lack of utilization", "increment does not increase profits" and other industry chaos, is pregnant with a new round of market change. This year, the industry frequent expansion, mergers and acquisitions or even collapse, the upstream chip industry is beginning to show up on the trend, our future will be LED Chinese "ten melee" into "three kingdoms". The result of industrial integration is more and more industry resources to the advantage of the enterprise, in the LED upstream epitaxial chip area, the future will be formed with several leading enterprises led market structure. Homogenization of the current product is serious, but in the long run, companies to price war to obtain the market is only short-term behavior. The recent phenomenon of frequent mergers and acquisitions between enterprises, but also the development of the industry to a certain stage that need to eliminate backward production capacity, backward technology and backward management of the necessary process.

After the integration period is three-dimensional competition

Future customer demand will no longer be the original plane, single, and will evolve into multi-dimensional, three-dimensional needs.

From the recently released major media 2013 upstream of LED listed company Third Quarterly perspective, the mainstream chip vendors situation has been compared to the same period last year has greatly improved, the chip price decline has narrowed, some enterprises can also reach the chip price unchanged from the previous quarter level. There are well-known chip companies responsible person believes that the next chip prices will not rise nor too much decline. Chip industry is about to enter an era of product performance competition.

Entrepreneurs in the industry, there is no lack of price war is the technical war of the argument, they believe that the current LED chip, is far from reaching the theoretical luminous effect. Many companies in China, including foreign companies, are doing some deeper research and development of technology. Domestic companies want to be able to use 1~2 years, so that the current LED chip light-emitting efficiency and then improve the 30%~50%, luminous brightness of 200lm or more. Their same