Subsidies lead to low investment in the upper end of the low rate of investment reshuffle inevitable

Upstream blind investment in the aftermath of the heat exposed

Once the capital stir LED upstream is paying the price for once ardent. Yesterday, the Yangcheng Evening News reporter obtained from the Institute of high technology LED industry data show that the upper reaches of the LED industry oversupply, the operating rate of less than 50%. Insiders pointed out that the next year is expected to LED upstream areas will still face pressure on the stock market, shuffle inevitable.

Production equipment idle

Due to the LED upstream equipment (MOCVD) subsidies to the largest, so in recent years, LED upstream investment overheating is the most obvious. "(LED upstream chip) from 2009 to 2010, the basic supply and demand balance, oversupply in the year to 2012, has been a serious oversupply in 2011. In the high tech LED summit site, the general manager of the wave Huaguang optoelectronics Limited by Share Ltd Zheng Tiemin bluntly.

With the serious excess capacity is accompanied by a price war, according to the LED Engineering Research Institute of statistics, compared to the LED substrate and the upstream chip prices fell more than 1/3 at the beginning of the year, the upper reaches of the profit was severely due to compression. On the one hand is the lack of demand, on the one hand is meager profits, many upstream enterprises choose to cut. High tech LED Industry Institute statistics show that nearly 50% of the entire LED upstream of the machine are idle.

Crazy investment in the upstream of the LED field in recent years the three quarterly show, 80 sets of MOCVD equipment in two of its subsidiaries, only 38 units in the production state, remove another 5 for R & D, the other 37 machines are still in the installation process, the operating rate is only slightly higher than the 50%.

"Shuffle tide" undercurrents

A number of enterprises in the Yangcheng Evening News reporter interviewed said that the current industry has not yet warmed up, the upper reaches of the next year will remain in the inventory state, so prices will continue to decline. On the other hand, with excess capacity, the government subsidies for the purchase of equipment has also begun to become cautious, companies will really begin to fight the market level. In fact, three quarterly reports of listed companies have revealed clues. Due to the continued decline in the price of the product, the three quarterly bulletin photoelectric display, its revenue and net profit decreased by 25.7%, respectively, up to 49%. But in recent years has been subsidized scenery Elec-Tech three quarterly show, the first three quarters of net profit fell 57.41% over last year, the company said in the report, the main reason is the decline in the reporting period, the company's government subsidies over the same period last year to reduce costs and increase.

Zheng Tiemin said: can be expected in the next few years there will be closed down, asset restructuring, mergers and acquisitions, new projects launched phenomenon. High engineering LED industry institute director Zhang Xiaofei predicted that next year, the remaining 30 of the remaining epitaxial chip companies, the reshuffle will continue to deepen.

Links: upstream investment flows downstream

According to the Institute of LED Institute of industry statistics, in 2011 the new plan for the LED industry reached 194 billion 500 million this year, a sharp decline of 100 billion, down nearly 50%. Zhang Xiaofei believes that this shows that the industry is gradually becoming rational.

Data also show that due to excess capacity in the upstream, the original capital flows upstream chip, this year has turned to downstream applications. Epitaxial chip new planning investment from 46% last year to $10%, while the downstream applications from last year's 21% pulled up to 53%. Zhang Xiaofei said that the concentration of capital downstream will exacerbate the polarization of the downstream.

It is understood that this year, the original epitaxial chip industry Elec-Tech also accelerating extension to the application side, at the same time including honglitronic other midstream packaging companies are also actively cut downstream applications. Zhang Xiaofei believes that more capital into the downstream, large scale, the original products of excellent enterprises will continue to expand the scale, while small firms will rely on dumping strategy to get part of the market, the most sad is the scale and product level is in the middle of the enterprise".