Zhang Xiaofei: The current chip increase is close to 50%

Under the global wave of energy conservation and environmental protection, the two industries are gaining momentum. One is the LED lighting industry, which is gradually becoming popular, and the other is the electric vehicle industry, which is becoming popular. In the three-month investigation, the reporter found that from looking around for customers to picking customers, borrowing money from four places to buy equipment to venture capital queuing to participate in shares, the LED lighting industry has been hot to the market expectations. At the same time, the price of LED-related products is also rising. This emerging industry that has brought the world "brightness" has undoubtedly embarked on the Avenue of the Sun.

This year's LED industry can be described as hot. The hottest ones are upstream equipment, raw material suppliers, and midstream chip makers. Diyuan Optoelectronics, located in Wuhan, is China's largest high-power chip manufacturer. When the reporter visited, he saw that the factory was working overtime. The production of chips, and venture capital institutions are also in the end, with a view to participating.

Chip is missing the buyer

In recent months, Zhang Xiaofei, general manager of Gaogong LED Network, has been busy researching in various places. He knows how hot the LED industry is in China. Zhang Xiaofei said, “From the end of the first quarter of 2010, global LED chips and epitaxial wafers began to increase in price. Currently, the chip growth rate is close to 50%, and the price is expected to be consolidating in the third quarter.”

This rise in chip prices is somewhat uncharacteristic. According to the usual practice, the price of LED chips has been falling more and more, and the average annual decline has reached 20%. The second quarter is usually the traditional off-season, and the possibility of price increases should be smaller. In this unexpectedly rapid price hike, China's major chip giants have ushered in a period of high profit growth. Taking Silan Micro as an example, the gross profit margin of its LED chips in the fourth quarter of 2009 was 40%, and its gross profit has increased to 50% in the second quarter of 2010.

Despite the rising price of LED chips and epitaxial wafers, the market is still in short supply.

Diyuan Optoelectronics, China's largest manufacturer of high-power LED chips, chose a small price increase. Wu Zhihong, chairman of Diyuan Optoelectronics, said in a down-to-earth manner, "Although we can raise the price sharply by the strong market demand, we have chosen a small price increase and selected downstream partners in consideration of the future long-term cooperation." According to Diyuan Optoelectronics Dong Zhijiang, general manager, said that 80% of domestic high-power chips rely on imports, and another 20% are mainly from Diyuan Optoelectronics.

According to the reporter, red and yellow LED chip makers are more comfortable than blue-green LED chip makers. Zhang Xiaofei said, "A few years ago, the market for red and yellow LED chips was far less than the market for blue-green LEDs and white LED chips, and it was in a state of shrinking. Many companies fled the red and yellow LED chip market and switched to blue-green. The market for optical LED chips. I did not expect that the market demand for red and yellow LED chips will increase in 2010, and a few companies that still stick to this market have benefited a lot."

Dry-made optoelectronics is a company that sticks to this field and has benefited a lot from this round of price increases. A person in charge of the company told reporters helplessly, “The red and yellow chips we produce are indeed in short supply. The current production capacity can only meet the demand of 50% of the top 70 customers. If we consider the 70 customers, the production capacity in 2011 will increase by 80%. %, the future supply gap will be even larger."

Who is pushing up the price of the chip

Who pushed up the global chip price? In the face of huge supply gaps and rising prices, why are LED chip and epitaxial wafer manufacturers not expanding rapidly? According to the reporter's understanding, LED chips and epitaxial wafer manufacturers are more than enough, because the upstream equipment and raw materials are monopolized by overseas giants, and they are caught in a serious shortage, which tightly grips the pace of expansion of Chinese enterprises. .

First, MOCVD, the main equipment for producing LED chips, is seriously out of stock. Xi'an Zhongwei Optoelectronics Co., Ltd. said that the two sets of MOCVD ordered at the end of 2009 will not arrive until half a year. At present, the global MOCVD equipment market is monopolized by two companies, Aixtron of Germany and Veeco of the United States. The total number of orders for this year is 600 to 700. The market research institute Shuiqing Muhua Research Center pointed out in the report that the two companies' shipments of MOCVD equipment are expected to reach 662 units this year. This is the sum of shipments in the past three years, and shipments are expected to reach record highs in 2011. Orders for MOCVD equipment have been placed in 2012, given that production capacity is far from meeting demand.

What comes with the order is profit growth. Aixtron's second-quarter revenue reached 198 million euros, up 24% year-on-year. Orders received reached 175 million euros (up 4% year-on-year); Veeco's second-quarter revenue reached $253 million, up 55% year-on-year. Veeco CEO John R. Peeler said that in the second quarter alone, he received orders of $347 million, a record high. Among them, LED and solar-related orders reached US$260 million, and revenue is expected to exceed US$1 billion in 2010.

Secondly, materials such as sapphire substrates and organic metal (MO) gases, which are important raw materials, are increasing in price. Since the end of last year, the two-inch sapphire substrate has risen from a minimum of $8/piece to about $30/piece, and there is still no sign of stagnation. Recently, Rubico, a global sapphire monocrystalline faucet in Illinois, decided to continue to raise the price of sapphire substrates in the fourth quarter. Rubicon's price increase is fearless, as manufacturers such as China and South Korea have aggressively expanded MOCVD equipment, resulting in a current sapphire substrate supply gap of 10% to 30%. Rubicon's downstream customers can only passively accept price increases. Jiang Zhongyong, general manager of Hangzhou Silan Ming, said with anxiety that there may still be a shortage of sapphire substrates this year and next.

Zhang Xiaofei said, “MOCVD equipment and sapphire substrates account for a considerable proportion of total cost. Among them, sapphire substrates account for about 12% of the total cost. Therefore, these upstream important equipment shortages and rising raw material prices directly push up LED chips and extension. The cost of the film." Zhang Xiaofei said, "Even if MOCVD and sapphire substrates arrive, it does not mean that they can be produced immediately. Installation, commissioning and trial production will take at least 3 months to 6 months. Only a few companies have two It can be produced within a month."

This up-and-coming "uplifting" situation is exposing the shortcomings of China's LED industry. Ren Yuanhui, a researcher at the China Lighting Association's Interior Lighting Professional Committee, pointed out that China has not yet formed a complete LED industry chain. Developed countries have the right to speak on LED chip technology. 80% of domestic high-end chips rely on imports; in addition, the uniform production standards and the lack of LED lamp test methods have greatly limited the development of China's LED lighting industry.

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