Terminal demand for China's LED chip manufacturers substantial correction expansion plan

Dramexchange (TrendForce)'s LED industry research firm LEDinside said, China chip factory in the local government's subsidy policy last year, about LED lighting market demand, large open plant expansion program, high production equipment MOCVD machine number. But by the end of 2011 LED industry demand has not been clear, product inventory continues to improve, so manufacturers have begun to slow down the purchase of MOCVD equipment plan. Besides, Chinese due to inflation, constantly raise the deposit reserve rate and monetary tightening, but also makes the local government financial subsidies for funding difficulties. Under the influence of various factors, Chinese LED chip manufacturers to hold a conservative attitude for the second half of 2011 expansion plan, LEDinside forecast 2011 MOCVD new machine installation quantity is 711, among them, the new machine installation China market volume 380 sets.

The pressure of inflation makes the Chinese government since the beginning of 2011 to tighten the money supply Chinese consumer price index surged to new highs, the inflation rate in May was 5.5%, the people's Bank of China by tight monetary policy to control inflation. Since June 20th, the people's Bank of China has raised the deposit reserve ratio 6 times, making China's large and medium sized financial institutions deposit reserve ratio reached a record high of 21.5%. Benchmark lending interest rate also rose from July 7th to 6.56%, the rate of interest for the third time in. From the point of view of the amount of new loans in May, compared with April, dropped 25%, from RMB 740 billion to RMB 552 billion, compared with 2010, decreased by 13.7% over the same period, also shows the local enterprise financing more difficult, with increasing labor cost, operation cost of the enterprise management is also facing challenges.

Monetary tightening effect of LED manufacturers expansion plan in addition, since the China Yangzhou municipal government declared the second half of 2011 will begin to stop the MOCVD purchase subsidy policy, Chinese and Taiwan chip factory began to worry that the local government will stop subsidies, thus began to purchase large quantities of MOCVD machine in the first half of 2011, hope to catch up with the subsidy policy. Period.

However, due to the tightening of monetary policy, the amount of financial subsidy China LED enterprises are not easy to obtain, affect the expansion schedule, coupled with the overall terminal sales slump and chip prices fell sharply and other factors, part of the LED chip manufacturers capacity utilization fell to 50%, for the production of machine for engineering use. Therefore, various manufacturers have delayed the expansion of production schedule.