Chip capacity gradually released upstream gross margin is facing a return

According to the high-tech LED industry research institute (GLII), the domestic LED epitaxial project investment monitoring data shows that the number of blue-green MOCVD machines that can be put in place in China is close to 500 in 2011, and Taiwan's extension manufacturers directly invest in mainland China projects will have 210 MOCVD. 40%.

According to the schedule of blue-green machine arrival time, 161 units will be in place in the second quarter, and 155 units will be in place in the third quarter. The remaining 203 units will be in place by the end of this year. Based on the current average MOCVD commissioning period of three months, the number of new blue-green machines that can enter into mass production in 2011 is about 300. Excluding the order-based capacity of Taiwan-funded enterprises (that is, most of the released capacity is digested by the downstream companies that are also the project shareholders), GLII estimates that the domestic production of blue-green optical chips will increase by more than 30 billion this year (according to the first year) The average production capacity utilization rate of 50% is calculated. This figure is equivalent to the annual production capacity of Taiwan's first epitaxial chip maker, Jingyuan Optoelectronics.


Note: The in-position time indicates the time when the MOCVD machine equipment arrives at the factory, and does not include the commissioning and trial production time of the machine; the actual production time is delayed by an average of one quarter or so. The above data is provided by the Gaogong LED Industry Research Institute.

LED lighting begins to show off the mountain dew

From this year's global LED application market, the situation of TV backlight as the main chip application in 2010 will gradually be changed. Instead, LED lighting will begin to show its dew.

On the one hand, most research institutions, including GLII, have lowered their global LED TV shipments in 2011. Mainly considering that this year's major LCD TV brands changed product development and marketing strategies, and turned to focus on gross profit promotion. This makes the demand for LED TVs to be deferred for 4-5 months, so the penetration rate of LED TVs will not be as good as expected. This will undoubtedly further accelerate the shift of LEDs from the backlight to the general lighting field, which will bring downward pressure on the price of LED devices for lighting.

On the other hand, due to the explosive demand for LED lighting after the earthquake in Japan and the fact that some commercial users should be short of power supply in the coming summer this year, the use of LED energy-saving lighting has been increased, so the market for LEDs in lighting applications The demand will be gradually released.

At the same time, the world's major LED lighting chip and device suppliers said that the company's lighting products will start to grow in April, of which China's mainland will be based on government outdoor road lighting, Europe and the United States is based on LED bulbs and indoor lighting .

As a result, another problem facing the market has emerged immediately.

Price gross profit simultaneously declines overcapacity

At present, the general view in the industry is that in the near-furious upstream investment environment, the supply and demand of global LED upstream chips will be extremely troublesome in the next few years. The biggest problem is that there will be a very serious overcapacity problem, which will lead to the average price of chips. The retaliatory decline.

As the largest application market for LED in China in the future, the domestic upstream epitaxial chip investment boom since 2009 is hidden.

First, there is a lack of overall planning for the development of industrial structure. As the core of the LED industry, the upstream epitaxial chip field has a short development time in China, and the main patents are controlled by foreign giants. Therefore, this round of investment boom lacks overall strategic planning, and industrial policies and standards are unclear and entry barriers are low, resulting in blind investment among regions and industries, and disorderly development is more prominent.

Second, the capacity expansion of LED upstream epitaxial chips exceeds the market's carrying capacity. The overcapacity of upstream products in the industrial chain will eventually lead to two results, one is the decline in product prices, and the other is the decline in product gross margin.

According to GLII research, since 2009, the domestic LED epitaxial chip industry gross profit rate has been in a rapid growth stage, from the initial 30% to 45% in 2010, and even some companies' product gross profit is as high as 60%. On the contrary, the downstream links have a steady downward trend of 5 percentage points per year.

In the second half of 2010, the performance of the TV backlight market was lower than expected, resulting in oversupply in the upstream chip market, which led to a decline in chip prices, and also became a turning point in the distribution of gross profit in each link.

According to previous GLII survey data, with the significant decline in the cost of LED upstream epitaxial chips in the past two years, upstream epitaxial chips, midstream packaging, and downstream applications have formed a market scale ratio of 1:4:9. With upstream epitaxial chips 50%, midstream packaging 30%, and downstream application 20% self-profit rate calculation, in the entire LED industry chain profit distribution, LED upstream epitaxial chips only account for 14%, midstream packaging accounts for 34%, downstream applications Accounted for 52%, more than half.

In the future, with the gradual release demand of LED general lighting application market, part of the profits of upstream epitaxial chips will gradually shift to the middle and lower reaches. GLII is expected to start in 2012, and the gross profit margin of domestic and foreign extended chip manufacturers will basically return to before 2009. 35% level.

At the same time, the GLII research report believes that the cycle of rising price of this round of chips in early 2010 is the cycle of expansion of existing enterprises, about one year or so, and after the rise, the gross profit margin of upstream products will stabilize between 35% and 45% in the short term. . If the profit is lower than this level, the original enterprise will not have the desire to expand production. As the downstream demand continues to grow, the supply and demand will create a gap, which will drive the price increase; if it is significantly higher than this level, it will lead to the expansion of the enterprise. Production increases supply, thereby curbing prices.

The above content is taken from the "High-tech LED" magazine May issue of the high-tech observation column article, please refer to the magazine for more contents >>

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