[Text / Gaogong LED Zhao Hui] Sanan Optoelectronics' rapid expansion in the field of LED epitaxial chips seems to have stopped.
On December 11, 2015, Sanan Optoelectronics announced that its wholly-owned subsidiary, Xiamen Sanan Optoelectronics Co., Ltd. signed a “Procurement Contract†with AIXTRON SE of Germany on September 26, 2014. The contract stipulated that Xiamen Sanan to AIXTRON SE Purchase 50 chamber LED main production equipment CCS MOCVD SYSTEM AIX R6. Up to now, the batch of equipment has reached 3 chambers, and after debugging, it can not fully meet the needs of Xiamen Sanan process. After friendly negotiation, the two sides decided to terminate the "purchase contract" for the remaining 47 chamber equipment.
As soon as this announcement came out, it also caused widespread discussion in the LED industry. More industry players said that Sanan’s move would help suppress new capacity, and LED chip prices are expected to stabilize and even rebound.
According to the statistics of the High-tech Research Institute LED Research Institute (GGII), the output value of China's LED upstream epitaxial chips reached 12 billion yuan in 2014, a year-on-year increase of 43%. In 2015, the output value of China's upstream epitaxial chips increased by only 8.3% year-on-year, with an output value of 13 billion yuan, and its growth rate slowed down noticeably.
At the same time, however, the concentration of LED epitaxial chip companies has further increased, and the revenue of the top five chip companies accounted for 65%. In other words, the chip makers including Sanan Optoelectronics, Tongfang, and Huacan Optoelectronics account for nearly 70% of the domestic market.
Since 2014, with the rapid increase in the demand for LED lighting, the sales of upstream epitaxial chip companies have been booming. In the case of continued strong sales of chips, the scale of chip companies has grown significantly. Sanan, Dehao Runda, Huacan, Ganzhao Optoelectronics, Deli Optoelectronics, and Aoyang Shunchang have not been in the past two years. Hesitantly continue to expand production.
Under the double stimulation of market demand and government subsidies, MOCVD equipment procurement has experienced rapid growth. In 2014, the number of MOCVDs in the country reached 1,172, an increase of 15.2% over the number of machines in 2013. In 2015, China's LED chip industry is still in a period of rapid development. The epitaxial chip manufacturers continue to expand production, and the number of new MOCVD is nearly 250.
However, with the slowdown in the LED lighting market in 2015, coupled with the upstream chip factory, the price of LED chips will also fall.
As Dr. Zhang Xiaofei, Chairman of Gaogong LED, said at the 2015 High-Tech LED Annual Meeting, “The chip company’s operating rate in 2015 is very high, more than 85%, but many companies have not made money. Because chip production has increased by 60%, and output value. It only grew by 8.3%."
According to GGII survey data, the price of LED chips in China has dropped by 30%-40% in 2015.
According to market news, in 2015, the first shot of the chip price reduction was the largest domestic chip production capacity of Sanan Optoelectronics.
"As a chip leader, using the price and other means to squeeze the market survival space of small and medium-sized enterprises is also a reasonable market strategy. From the current point of view, the concentration of the chip market is also increasing." The chip company that is not willing to be named is responsible for People said.
However, as the cost of the large-scale factory continues to expand, the small and medium-sized chip factories, especially without the strong capital support behind them, are struggling.
Zhou Mingjun, president of Jingyuan Optoelectronics, said that due to the increasingly fierce competition, all LED chip manufacturers in Taiwan are expected to merge into 1-2 manufacturers, as will China, and only 5-6 LED chip manufacturers are expected to survive.
Jiang Zhongyong, general manager of Silan Mingxin, also believes that “from the perspective of market demand, there are only about five LED chip factories that will continue to exist in the next five years. In the future, they will have cost control capabilities, technological leadership, stable product quality and scale production capacity. The company can stay."
Another chip giant, Huacan Optoelectronics, began to expand its production.
Just after New Year's Day, Huacan Optoelectronics (300323.SZ) issued the announcement on the “Project Investment Framework Agreement with Zhejiang Yiwu Industrial Park Management Committee†and announced the resumption of stocks.
The investment framework agreement shows that Huacan Optoelectronics will invest in LED extension, chip and industrial chain extension projects in Yiwu Industrial Park. It is estimated that the total investment will be about RMB 6 billion. At the same time, both parties agreed to jointly set up LED industry M&A funds for Huacan Optoelectronics LED The industry chain conducts mergers and acquisitions.
In return, Yiwu Industrial Park Management Committee will give Huacan Optoelectronics the R&D project of the project company no more than 400 million yuan of research and development and industrial development subsidies, 8 years of 1.2 billion yuan loan interest subsidy, equivalent to equipment investment in the project within 5 years 20 % of equipment investment subsidies and other industrial development funds support.
Some people in the chip industry said that the accelerated expansion of Huacan Optoelectronics' new project is not to narrow the gap between the production capacity of Jingdian and Sanan.
In this regard, Hua Can Optoelectronics Secretary Ye Aimin also said that in terms of production capacity, Huacan is the second largest and the world's fourth largest LED chip manufacturing company in terms of production capacity, and plans to expand production in the next few years. The world's top three levels, the industry's leading position.
The third-generation wide bandgap semiconductor technology, visible light communication technology and integrated circuit chip industry, which have more market space, are gradually becoming the next competition space for LED chip companies.
Xie Mingxun, deputy general manager of the Crystal Power R&D Center, also said that the high demand for the lighting application market is actually only an illusion. The truth is that the price war in recent years has led to a sharp drop in profits. In order to seek better profits, Jingdian is actively preparing to invest in the market of GaN LED power components; currently, the market size of GaN power components is only about one-third of the overall lighting market.
Sanan Optoelectronics has also begun to make frequent efforts in the field of integrated circuits in recent years.
“Sanan’s development strategy is very clear, and its main layout is three directions: firstly, it will continue to consolidate the leading position of LED chips, expand production capacity and optimize product structure; secondly, compound semiconductors will gradually develop to IDM from processing and manufacturing; third is active. Expand the application areas of products and develop high value-added application products, such as LED intelligent lighting communication (LiFi) products, vehicle networking system products, photoelectric intelligent monitoring products and other integrated circuit applications," said Guo Yuan Securities researcher Ms.
Ye Aimin was also convinced when Hua Can Optoelectronics would expand into the field of semiconductor materials other than LEDs. The vision and current business scope of Huacan Ventures has always been semiconductor materials and devices, not limited to LED materials and chips.
"Hua Can has been the 10th anniversary of its establishment. The executive team has always been a technical expert. It is very familiar with the development direction and application prospects of the entire semiconductor industry including LED." Ye Aimin said that the development and application of compound semiconductors are only Just beginning, there is limitless possibilities in the future.
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