Upstream out of the war to open the LED company actively expand production scale

Knowing that there is a tiger mountain, Tiger Hill line, LED upstream epitaxial chip industry is staged this scene. China Optoelectronics (300323, closing price of $13.15) in October 22nd announced that it intends to invest $305 million to build Hua Guang Optoelectronics (Suzhou) Co., Ltd. LED epitaxial chip chip two projects.

However, according to LEDinside statistics, as of the end of 2012, the number of Chinese MOCVD equipment more than 900 units, but the capacity utilization of less than MOCVD of the year, showing that China's LED epitaxial chip capacity has been surplus. Analysts believe that the expansion of the company's purpose is to expand the scale to reduce costs in order to cope with the increasingly fierce battle.

Expanding production scale

Hua photoelectric announcement shows that the project plans to form an annual output of 480 thousand inches of red and yellow LED epitaxial wafer (for personal use) and the production capacity of 15 billion 400 million red and yellow chips. At the same time, the company can Hua photoelectric (Suzhou) capital increase of 50 million yuan to supplement the first phase of the project construction needs. Its securities department, told reporters that the first phase of the project will be able to come out in the fourth quarter, the current phase of the proposed feasibility study is only two, specifically to be approved by the general meeting of shareholders.

The source said that the chip needs to support the sale of three colors, the first phase of the project is mainly blue chip, the two phase is red and yellow light, the company's customers also hope to be able to support sales, so that the quality can be more stable.

In addition to the pairing problem, Hua photoelectric also take into account the size effect. Announcements, expanding production is to give full play to China photoelectric (Suzhou) scale effect to reduce production costs.

The Securities Department sources said the scale, such as the number of equipment, compared with other companies or less.

Just a few days ago, Guangdong is in the transition period of Gan Hua (000576) securities department official told the media that the 10 Taiwan MOCVD54 machine company has in place, is expected before the end of the trial production.

China Star Optoelectronics (002449) in September this year, the announcement, the proposed increase to raise $630 million for the National Star semiconductor epitaxial chip project (phase two) construction and supplement the company's liquidity.

State star photoelectric secretaries Liu Di said in an interview with reporters, the investment in the National Star semiconductor, the company plans to two to three, the first phase is the 20 equipment, the second phase is also the 20. She also stressed that the company hopes to have a scale effect.

However, from the current point of view, the domestic epitaxial chip production capacity has been in excess. According to LEDinside statistics, in 2012 China's MOCVD capacity utilization of less than 50%. Despite the recovery in the middle and lower reaches of the LED this year, to some extent, led to the sale of upstream epitaxial chip. But according to the reporter, the overall production capacity to digest.

Knockout will result in a few years

Liu Di said that the positioning of each company is not the same, the national star itself to do the packaging, to digest part of the upstream chip capacity.

In June this year, de Ho Runda (002005) chairman said in a forum, LED upstream epitaxial chip in the future can not escape the law of the development of the global semiconductor industry, may be the last only 3 to 5 LED epitaxial chip companies, even 2.

Wu Yulin, chairman of FSL Lighting Association, said in an interview with reporters, LED epitaxial chip industry business concentration is very high, the scale is getting bigger and bigger, and the price is getting lower and lower.

He believes that the reason why LED companies have now in excess of the epitaxial chip case, still choose to expand, is hoping to occupy a cost advantage in scale, in order to obtain a certain market share, intensified the knockout.

Wu Yulin said, LED industry is a big reshuffle trend from upstream to downstream, so in the next few years, the epitaxial chip leading enterprises to be able to show up, some other companies may be eliminated.