Some people say that investment opportunities in the LED chip industry have arrived. The arrival of investment opportunities in the LED chip industry is determined by the following four factors:
1. With the arrival of the peak season, LED chip inventory levels have dropped significantly.
According to recent shipment surveys with many companies, we have communicated with upstream PSS or sapphire flat sheet suppliers. Many LED companies have little inventory. A few companies can negotiate orders with packaging companies instead of making advance payments.
2. Whether the production capacity of the chip industry is tight or not depends on the degree of production capacity release and digestion of Dehao Runda and Huacan. We visited many domestic companies and the monthly production capacity of the main domestic LED chip factories is as follows:
1. Currently only Dehao and Huacan in China still have certain production capacity waiting to be released. Dehao is still in an uneconomical state in 4-inch. Although the current shipments have improved significantly, the profit has not improved significantly, which also limits Dehao's capacity utilization. Although Huacan's main aluminum electrode process is good in terms of process, customers in the back-end chip segment still have concerns about demand. Currently, the average shipment is 150,000 pieces. If we can
If it is full, it can reach the level of 300,000 pieces. But except for these two and the chip factories for sale, other chip companies have basically full orders.
2. Blu-ray, Jucan, including Nationstar Semiconductor, are currently for sale due to various reasons. In particular, Blu-ray had problems with its chip production in 2013 and has high debts. Currently, there is almost no equipment in operation.
3. Sanan’s current production capacity has reached more than 90%, and it will definitely increase production capacity in 2015. The problem now is that if Sanan installs a 124-piece German furnace, regardless of the commissioning time, the equipment will not be in place until the end of the year or even the first quarter of next year. Another expansion may be the acquisition of Blu-ray, etc., which is a revitalization of stock.
4. Therefore, judging from the situation in the second half of this year, there should be no more production capacity released, mainly due to the digestion of the production capacity of Dehao and Huacan and the expansion of Aoyang's production capacity. Overall, the industry's competitive environment has reached its best period. After the existing production capacity of Dehao and Huacan is almost exhausted in the second quarter, the chip market will become tense.
3. The peak of the new round of production expansion will not be until next year. From the perspective of the intensity of production expansion, it should be relatively benign and can be digested by industry growth.
Look at the production capacity in 15 years
In terms of production expansion, excluding the San'an part, the production capacity expansion of other major manufacturers is probably less than 500,000 pieces. Even considering technology upgrades, it can probably increase by 250,000 pieces. The overall increase is 750,000 pieces. This new addition also covers the demand for general light and backlight. Production capacity expansion in South Korea, Japan and Taiwan is basically cautious. I think that after the lighting demand starts, the new production capacity will basically be digested and there will be no big problem. The LED chip industry has ushered in its best period, and this boom is expected to last for several years.
4. Upstream raw materials will not cause cost pressure, and the profitability of chip companies will increase.
At present, the price of MO sources has dropped by about 40% compared with the middle of last year, and the price of ammonia has also dropped by more than 25%. While some sapphire production capacity has been significantly released in the third quarter, there is almost no possibility of price increases for LED companies. However, when epitaxial wafers are converted into chips, they fell by about 10% last year. At the same time, according to this year's situation, there is even a taste of price increase, and the profits of LED chip companies will improve significantly.
ANNA