Rapid Expansion Of Production Capacity, Rapid Growth Of The Three LED Chip Giants

Rapid expansion of production capacity, rapid growth of the three LED chip giants

    In 2017, the market demand for LED chips continued to increase, and the price trend of chips remained basically stable. The chip companies stepped up the progress of expansion. According to LEDinside's statistics, LED-based MOCVD equipment has an estimated 401 new installations worldwide (K465i equivalent) in 2017, marking the peak of expansion capacity since 2011.

    However, the main force for this round of expansion was production of Sanan Optoelectronics, Huacan Optoelectronics, and Australian Ocean Shunchang and other Chinese manufacturers, and overseas manufacturers showed little incentive. LEDinside said that with the continuous release of new production capacity, the cumulative installed capacity of MOCVD in mainland China accounted for 54% of the total in 2017, and LED chip production capacity accounted for 58%.

    The above changes confirm the shift of LED chip industry production capacity to mainland China. As the technology gap between domestic technology and international manufacturers is getting smaller and smaller, as well as the active promotion of domestic government policies, foreign companies slow down the pace of expansion, and even some companies are gradually shrinking production capacity, the domestic LED chip production ratio is increasingly higher In the long run, the domestic market size of LED chips will inevitably continue to expand, especially the proportion of market share of first-tier LED chip manufacturers will increase significantly.

    Regarding the LED chip capacity of specific manufacturers, by the end of 2017, Sanan Photoelectric Co., Ltd. has reached 2.7 million pieces per month (half of a two-inch piece), Huacan Photoelectricity has reached 1.7 million pieces per month (a discounted two-inch piece), and the company has Up to 1 million tablets/month (folded in two-inch tablets), compared with the end of 2016, they increased by 92.86%, 142.86%, and 488.24% respectively.

    At the same time of capacity expansion, the capacity utilization of the three major chip manufacturers continued to increase. Aoyang Shunchang said recently that the company's LED business operations were normal in the first quarter, with an additional 400,000 pieces of production capacity being promoted in an orderly manner. At present, equipment has gradually begun to be installed at the factory, and it is expected to reach its basic production capacity in the third quarter. At present, the LED chip capacity is in a state of full-scale production. According to the 2017 annual financial report, Huacan Optoelectronics' LED chip utilization rate is as high as 94%, and the substrate wafer utilization rate is as high as 98%.

    Thanks to the rapid expansion of production capacity, the performance of Sanan Optoelectronics, Huacan Optronics, and Australian Ocean Shunchang achieved rapid growth in 2017. From the perspective of revenue, Sanan Optoelectronics took the top spot with 8.394 billion yuan, up 33.82% year-on-year; and Auyang Shunchang ranked second with 3.588 billion, up 86.32% year-on-year; Huacan Optoelectronic ranked third with 2.63 billion, up Increased by 66.21%. On the net profit level, Sanan Optoelectronics re-crowned the "profit king" by 4.136 billion yuan, an increase of 46.04% year-on-year; Huacan Optoelectronics won the second place with 502 million yuan, an increase of 87.92% over the same period of last year; and Auscopole Shunchang occupied the 345 million yuan. Three, a year-on-year increase of 72.36%.

    According to the first quarter financial report of 2018, Sanan Optoelectronics, Huacan Optoelectronics, and Australian Ocean Shunchang 1Q18 realized net profit of 968 million yuan, 143 million yuan, and 87,781,000 yuan respectively, an increase of 40.14%, 76.84%, and 40.70% over the same period last year. From this point of view, the overall market environment for LED chips in 2018 will basically continue the 2017 trend.

    In 2018, LED chip makers will further release production capacity and will continue to expand chip production capacity in due course. For example, Sanan Optoelectronics will accelerate the infrastructure construction of the Nanan project in Quanzhou; Huacan Optoelectronics will continue to promote the construction of LED red and yellow chips and blue-green chips and its epitaxial wafers in Suzhou Subsidiary; Auyang Shunchang will do a good job in its expansion project, making The production capacity has gradually increased to 1.4 million per month.

    However, with the continuous expansion of key manufacturers and the further release of production capacity in 2018, fierce competition may still exist in specific market segments, and opportunities and risks coexist. Perhaps in light of this, major manufacturers have deployed new application markets, such as Mini LED, Micro LED in the application of display products. Both the Mini LED and the Micro LED belong to the LED, which is roughly the same as the traditional LED production equipment. However, the technology is a qualitative leap, and the requirements for stability and consistency are very high. From the perspective of product application, products made by Mini LED and Micro LED are excellent in terms of definition, picture quality, thickness, and reaction speed. In particular, the Micro LED solution is unmatched by other application solutions. The application will multiply the demand space. In addition, innovative applications such as light medicine, safety, sterilization and sterilization will become new growth points and growth drivers.

    According to LEDinside, Sanan Optoelectronics has long-term technical reserves in the fields of Micro LED and Mini LED; Huacan Optoelectronics has started mass production and sales of Mini LED, and actively cooperates closely with international manufacturers to develop Micro LED; Ooyang Shunchang 2018 Will increase the technical reserves of Mini LED, Micro LED, etc.