China growing trend of LED Chip in 2018
Domestic major LED chip companies have successively expanded production, domestic LED chips will have the problem of excess capacity, chip prices will turn downwards, foreign LED chip makers tend to be cautious in expanding production, supply growth is limited, China's LED chip factory Ao'Yang Shun Chang, Huacan Optoelectronics, Sanan Optoelectronics, etc. rely on the support policies of local governments, and rely on the advantages of capital, scale, etc. to actively expand production, and global LED chip production capacity gradually shifts to mainland China.
2018 LED chip market size
In 2016, LED chip Epistar shut down 25% of the blue chip production capacity, the supply & demand relationship of LED chips changed. The LED chip industry started to pick up in the second half of 2016, with the outbreak of the small-pitch LED market in 2017 and the downstream packaging of LED chips. The expansion of the industry has led to a certain gap in the supply of LED chips. The utilization rate of LED chip companies in China has approached 100%, and the output value of China's LED chips has maintained a rapid growth.
The data shows that in 2017 China's LED chip (excluding Taiwan, the same below) industry output value reached 18.8 billion yuan(RMB or CNY, exchange rate approx. 1USD=6.35 Yuan), an increase of 29.7% from 2016, accounting for 40% of the global LED chip output value; MOCVD possession from China is more than 1,600 units, net increase of 246 units around the year, LED chip production capacity accounts for more than 54% of the world.
It is expected that by 2018, MOCVD machines in China will continue to increase by 288 units to 2,200 units. With the major expansion of domestic LED chip companies, domestic LED chips will suffer from overcapacity, and chip prices will shift downwards. The growth rate of domestic LED chip's output value will slow down. It is expected that China's LED chip output value will reach 22.5 billion yuan in 2018, a year-on-year increase of 19.7%. The top three companies in the market will have a capacity ratio of 47.8%.
LED chip prices gradually reduced-
After years of development, the price of LED chips has been reduced through the improvement of light efficiency. The cost of chip production is mainly variable and fixed cost. The variable cost includes about 65% of substrate, metal organic reaction source and gas, and the fixed cost includes depreciation and other about 35%.
The improvement of the manufacturer's technology brings about the improvement of the LED light efficiency. The number of chips that can be cut per unit area of the epitaxial wafer increases, the cost of the chip decreases, and the chip price also decreases year by year.
LED chip industry changes
According to statistics, the market size of China's LED chip industry in 2016 exceeded 14.5 billion yuan, an increase of 11.54% from the same period of last year. From the second half of 2016 to the end of 2017, prices have stabilized and rose steadily. With the increase in production capacity of Chinese mainland manufacturers, and the gap between technology and Taiwan is getting smaller and smaller, the advantages of price, delivery, and rapid market response are obvious, and the LED chip country's production rate increased from 50% to 80% in 2008-2016. It reached 10.6 billion yuan, while imports were 3.3 billion yuan. Due to the significant price/performance advantages of mainland chip manufacturers, the export ratio has also improved. The export rate in 2015 was 8.1%, and in 2016 it increased to 9.6%.
China's LED chip industry output value (100 million yuan)
The global market share of the top ten manufacturers increased from 66.1% in 2010 to 85.3% in 2017. China's LED chip production capacity is concentrated at Sanan Optoelectronics, Huacan Optoelectronics, and other leading companies. In addition to OSRAM still plans to expand production whereas no other manufacturers from foreign manufacturers have large-scale production plans. Most of China's domestic chip makers have been unable to expand production and gradually withdraw from production capacity competition. Although Megachip has launched a new LED chip project, its impact on the market in the short term is still very limited.
Increased concentration of production capacity at the mainland chip factory-
It is expected that Sanan Optoelectronics, Huacan Optoelectronics and Aoyang Shunchang will occupy 71% of the mainland LED chip capacity in 2018.
LED chip industry development trend
In recent years, due to government policy support and R&D capital intensive investment in China, and accompanied by a large number of Chinese Taiwanese and South Korean LED industry technical experts and teams joining local companies, the average technical level of domestic LED epitaxial chip companies has made considerable progress and has achieved International advanced level.
Reducing the cost of epitaxy and chips is crucial for promoting LED applications. In recent years, researchers have started with new technologies, new structures, and new processes. Through technological innovation, they have continuously reduced the costs of epitaxy and chip production. The cost of white LED packaging will be reduced from US$25/klm in 2009 to US$0.7/klm in 2020, with the ultimate goal of LED cost being US$0.5/klm, and the average annual cost will drop by more than 30%.
In addition to luminous efficiency and unit cost, in LED display screens, backlights and other applications, the LED chip's light decay, brightness, color consistency and anti-static capabilities are also key technical indicators related to LED applications.
Although the expansion rate of several large manufacturers is surprising, the overall capacity expansion rate is relatively limited (145%). Considering that new machines such as Veeco's Red Bull, A7 micro- and A6 and some Axitron's R6 have become new machines. After the main model, K465i, CRUIS2 and earlier models gradually exit from the market, the overall market supply was more concentrated, and the capacity increase was also lower than expected.
In addition, subsidies for local government MOCVD equipment are relatively more concentrated. Differing from the pattern of early equal division, local governments are now more inclined to select companies with subsidies that have demonstrated good operational and management capabilities in the market economy.
The strength of the subsidy also needs to be determined according to the mode of one-on-one negotiation according to the company's strength and negotiating ability. Companies with advantageous industry status and good tax paying ability are in a more favorable position in bargaining with local governments.
From the supply structure point of view, because the expansion progress and margins of Sanan from 2017 to 2018 is only slightly higher than the expansion rate of the entire industry, compared to the fact that the absolute amount of expansion is not small, but relatively compared to Huacan and Aoyang, the expansion operation appeared too conservative.
The supply structure of the LED chip industry has lost the opportunity to transform into a structure similar to that of the semiconductor foundry industry, and may gradually form a three-legged structure similar to the DRAM memory industry. In contrast, assuming that CR3 is equal, the three-legged structure lacks stability, and its competitive strength is higher than that of a super strong one and is also higher than that of a duopoly structure.
With an industry profit of nearly 75%, Sanan, an industry leader, has the power to sacrifice some of its profitability to operate its production deterrence strategy, forcing back potential entrants (Zhao Chi) and compelling its competitors (Hua Chan, Aoyang Shunchang) to be more cautious to expand.
Although the big oligarchs in the LED chip industry will not be openly enough to jointly allocate output by a formal agreement, the increasingly high industry concentration and the demand price elasticity of LED chips will force companies to reach a tacit understanding and take the initiative to limit the production in order to keep price.
In short, in the LED chip market of 2018, there will not be a monopoly-style monopoly pricing, so it is difficult to maintain ultra-high gross margin, but there is a high probability that the price will not collapse again as in 2015. The degree of understanding and cooperation between the three oligarchs will become the key factor in determining the price trend of LED chips in 2018. However, the three oligopolistic structures have natural instability, and new game models are still in forming.
With domestic and foreign well-known manufacturers:
Well-known domestic manufacturers
1. Sanan Optoelectronics
Sanan Optoelectronics Co., Ltd. is a full-color ultra-high brightness LED epitaxial and chip manufacturer with international influence. It is mainly engaged in full-color super bright LED epitaxial wafers, chips, compound solar cells and III-V compound semiconductors. Such as research and development, production and sales, product performance indicators in the international advanced level.
2. Huacan Optoelectronics
Huacan Optoelectronics takes technology as the guide and brings together international technical forces. The global advanced level of blue-green LED epitaxy and chip production lines, including MOCVD, ranks in the forefront of the domestic market. In China, the LED chip market has formed a superior quality. Word of mouth.
3, Dehao Runda
Guangdong Dehao Runda Electric Co., Ltd. is a group company that focuses on small household appliances, LED and new energy related businesses. The main business includes the manufacture and service of LED chips, LED epitaxial wafers, LED lighting, LED display screens, LED packaging, LED devices, and small kitchen appliances.
4, Ao'Yang Shunchang
The company is committed to the development and development of China's metal logistics industry, as long as the business is the development, production and sales of LED chips.
5, Qianzhao lighting
Xiamen Ganzhao Optoelectronics Co., Ltd. was established in February 2006 with a total investment of more than RMB 300 million. It is specialized in the research, development and production of LED epitaxial wafers, chips and high-performance gallium arsenide solar cells for the quaternary systems of red, yellow and orange. Sales of high-tech enterprises.
6, Jucan Opto.
Poly Solar Technology (Suzhou) was established on April 8, 2010. It provides all blue light chips for white light processing, including 8*15, 10*18, 20*38, 40*40 and other product specifications. It is used in commercial lighting, industrial lighting, interior lighting, notebook backlighting, and television backlighting.
7, Shanghai Blue Lighting
Shanghai Blu-ray Technology Co., Ltd. was established in April 2000, is a company engaged in GaN-based LED epitaxial wafers, chip R & D and industrial production. The main products are: GaN based high brightness blue, green light epitaxial wafers and chips.
8. Tongfang Optoelectronics
Tongfang Optoelectronics Co., Ltd. is a subsidiary of the listed company's Tongfang Stock Co., Ltd., and has strong capital background. It specializes in research, development, production, and sales of white chips. The production base is mainly in Nantong, Jiangsu (in 2013, the Beijing base was relocated to Nantong). At present, there are 59 MOCVD companies, ranking fifth in the country.
In terms of upstream epitaxial chips, the company relied on the scientific research strength of Tsinghua University, combined with the Chinese Academy of Sciences and some R&D teams in Taiwan, successfully mastered the key technologies of the chip and applied for nearly 100 domestic and foreign patents. The company's small and medium-sized chips are now recognized by major packaging manufacturers. At present, the chip output scale is only inferior to Sanan.
9, Yuanrong Optoelectronics
10, Hua Lei Optoelectronics
Xiangneng Hualei Optoelectronics Co., Ltd. was established in June 2008. It is controlled by Hunan Coal Industry Group and other companies. It is a state-owned holding company with a registered capital of 388 million yuan. The company currently produces blue and green light epitaxial wafers and white light chips. Chip products are mainly medium and small power. In 2015, the company has formed an annual production capacity of 1.2 million pieces of GaN-based blue-green light epitaxy, 1.1 million chips, and 2.2 million kilograms of lamps.
Foreign well-known chip manufacturers
Famous LED chip manufacturer, CREE, USA, based on silicon carbide (SiC), gallium nitride (GaN), silicon (Si) and related compounds, including blue, green, ultraviolet light-emitting diode (LED), near-ultraviolet Lasers, radio frequency (RF) and microwave devices, power switching devices and silicon carbide (SiC) wafers suitable for production and scientific research.
The world's second largest manufacturer of optoelectronic semiconductors. Products include lighting, sensors, and image processors. The company is headquartered in Germany, R & D and manufacturing base in Malaysia, about 3400 employees, 2004 sales of 4.59 billion euros. OSRAM's best-known product is the LED, which is only a few millimeters long, has a variety of colors, low power consumption, and long life.
Nichia Chemical, a well-known manufacturer of LED chips, and a Japanese company, was established in 1956 to develop the world's first blue LED (1993), the world's first pure green LED (1995), built around the world Subsidiaries.
ToyodaGosei: Toyota synthesis, headquartered in Aichi, Japan, produces automotive components and LED, LED accounts for about 10% of revenue, Toyota synthesis and Toshiba jointly developed white LED, is the use of UV LED and fluorescent body combination, and general The combination of blue LEDs and phosphors is different.
As the world's leading LED supplier, its products provide highly efficient and reliable light sources for numerous products such as automobiles, electronic information boards and traffic lights, industrial equipment, cellular phones and consumer products. The high reliability of these components usually guarantees that there is no need to replace the light source during the lifetime of the device. Agilent's low-cost dot-matrix LED displays, a wide range of seven-segment displays and Agilent's LED light strips are available in a variety of packages and colors.
Toshiba Semiconductor is a major supplier of automotive LEDs, especially dashboard backlighting, car radios, navigation systems, and climate control units. The technology used is InGaAlP with wavelengths from 560 nm (puregreen) to 630 nm (red). Recently, Toshiba has developed a new technology UV + phosphor (UV + fluorescence), LED chips can emit ultraviolet light, excitation phosphors combined emit a variety of light, such as white light, pink, green light.
Lumileds Lighting is a global leader in high power LED and solid state lighting. Its products are widely used in lighting, television, traffic signals and general lighting. LuxeonPowerLightSources is a patented product that combines the small size and long life of traditional lamps and LEDs. Also provides a variety of LED chip and LED package, with red, green, blue, amber, white and other LED. LumiledsLighting is headquartered in the United States, the factory is located in the Netherlands, Japan, Malaysia, a joint venture between Agilent and Philips in 1999, in 2005 Philips completely Acquired the company.
Seoul Semiconductor is the largest manufacturer of LED environmental lighting technology in Korea and is one of the eight largest manufacturers in the world (Source: StrategiesUnlimited--LED Market Research Corporation). Seoul Semiconductor's main business is the production of full-line LED assembly and custom module products, including the use of AC-driven semiconductor light source products such as: Acriche, side LED, top LED, Slicing LED, plug-in LED, and piranha (super light) LED. Products have been widely used in general lighting, display lighting, mobile phone backlights, televisions, laptops, automotive lighting, home appliances and traffic numbers.
9, SemiLEDs Xuming
It is the world's leading high performance light emitting diode (HPLED) suitable for general lighting applications. SemiLEDs' LED chips are the smartest and most effective in the current market. Using copper alloy substrates, SemiLEDs has successfully developed and commercial MvPLED technology (metal vertical photonic light emitting diodes). With the metal substrate and the unique device structure, SemiLEDs'HPLEDs have better electrical and thermal conductivity resulting in higher brightness, efficiency and better heat transfer, suitable for lighting applications including displays, signage, communications, automotive and General lighting.
10. SDK Showa Denko
It is a representative comprehensive chemistry society in Japan. It has been developing liquid chromatography since the 1960s, and it has a history of more than 40 years. Produce GPC, GFC, special column for sugar analysis, ion exchange column, affinity column, organic acid analysis column, chiral separation column and ion chromatography analysis, etc. Showa Denko will develop the blue LED and green LED with the same luminous efficiency in the future, and plans to increase its LED business revenue from 10 billion yen in 2007 to 150 to 20 billion yen in 2010.