LED Industry Development Trends

Looking forward to 2013, the mainland government will continue to develop a strong LED attitude, and the elimination of incandescent light roadmaps will also be fully implemented. In addition, the active promotion of end users will help China's LED industry to grow steadily; but behind the growth, manufacturers will inevitably grow. In order to compete for the market, more intense prices, channels and talent battles are being launched.

The LED industry has already bid farewell to the high-margin era for mainland manufacturers. How to maintain and expand its own profit is an immediate problem for manufacturers. Overall, “competition and cooperation, price cuts, and boosting corporate profits” will be the main theme for the development of the mainland LED industry in 2013; while the industrial chain trend will be surrounded by epitaxial wafers, medium power devices, patterned substrates, vias, and LEDs. Five major topics such as backlighting applications have been developed.

1, epitaxial wafer volume increase price war detonated

The warming of orders in the first half of 2012 brought confidence to the mainland LED epitaxial wafer fabs, which led to the recall of the equipment purchase orders that had been shelved, and the equipment that had not been installed had also entered into operation. As of the end of October 2012, there were 823 MOCVD machines on the mainland. In terms of production capacity, the total capacity of the mainland LED chip production line is calculated as 2 wafers, which has reached 40.22 million wafers per year. The capacity utilization rate is maintained at 65% on average, with some equipment not yet assembled, with insufficient talents and insufficient market demand.

Although LED epitaxial wafer projects launched all over the country have caused the oversupply of domestic wafers, but optimistic about the future market size, there are still manufacturers continue to invest in LED epitaxial wafer projects in the mainland in 2012. Among them, Guangzhou Jingxin (planned to introduce 60 MOCVD), Foshan Qili Optoelectronics (planned to introduce 20 MOCVD production lines and supporting wafer production equipment) and Foshan Guoxing Photoelectric LED Epitaxial Wafer Project (planned to introduce 50 MOCVD) .

It is not difficult to predict that mainland manufacturers will release more LED chips in the market in 2013, and the chips of mainland manufacturers are mostly concentrated in the middle and low-end, so for mainland manufacturers who are good at price war, it is bound to set off a new round bloody battle. Most mainland chip makers receive financial subsidies from the local government. Even if the chip business suffers losses, they can also use the government subsidies to whitewash their financial reports. However, when it enters the market late, so in order to grab the market of competitors, manufacturers often launch attacks at lower prices. Taking Sanan, the largest wafer factory in the mainland, as an example, it directly puts forward the slogan “More than Epistar, Asia's No. 1” and targets the Epistars to not only sharply excavate corners, but also to pay 20 to 30% of the price. Downstream package vendors sell products. In the downturn of the market, the low-price strategy has indeed been effective. China's mainstream LED packaging companies such as Ruifeng Optoelectronics, Hongli Optoelectronics and National Star Optoelectronics have begun to use Sanan optoelectronic chips. In addition, Sanan has also significantly reduced its performance in recent years by sharply increasing the production capacity and price reduction of red chips, and eliminating the single product of the same company and Ganwei Photoelectric Co., Ltd., which is a mainland manufacturer. .

2, LED device prices stabilizing medium power rise

The price of LED devices in mainland China fell rapidly in 2011 due to the cold market. In 2012, as the market warmed up and the inventory gradually returned to normal levels, the decline rate stabilized, with a quarterly drop of about 6%. Currently, the price of LED devices is already at a relatively low level. Considering that although the price of LED chips still has room to fall due to price war, the prices of other raw materials are relatively stable, and there is still an upward trend in labor and operating costs. Takuma estimates that the price drop of LED devices in 2013 will be further controlled at 3 Within %.

In the case of decreasing LED device price space, LED manufacturers tend to use medium-power devices (0.2 to 0.5 W) and gradually replace traditional low-power devices (0.06 to 0.1 W) for indoor lighting.

Taking a 16W LED lamp as an example, if a 3,528 white light device of 0.06W is used, it requires 270 pieces, the total cost is 32.9 yuan (about NT$158), and the luminous flux is only 7lm. However, if a 0.4W 5050 white light device is adopted, only 40 pieces will be needed. The total cost is RMB 14.3 (approximately NT$69) and the luminous flux is as high as 38lm. It can be seen that the adoption of medium power chips for packaging will be a trend in the future.

3, the pattern of the substrate layout to speed up the 4 substrate and so on

Although the price of the mainland's 2-inch sapphire substrate rebounded slightly from 2012's lowest level of 8 US dollars in 2012, the overall market supply was sufficient, and the price was always within 9.5 US dollars. In order to improve product performance and gross profit margin, sapphire substrate manufacturers such as Tongxin Optoelectronics, Dongjing Bolante, Suzhou Sea Platinum Crystal, Hefei Jingqiao, Keris Optoelectronics, etc., have invested in Pattern Sapphire Substrate (PSS). Developed and purchased Lithography and Etching machines to increase the productivity of patterned substrates. It is estimated that the permeability of sapphire substrates made in China's graphic substrates in 2012 will exceed 30%, and it is expected to approach 50% in 2013, which will in turn drive the average selling price of the mainland sapphire substrate market and inject new products into the sapphire substrate industry. vitality. Takuma estimates that the average selling price of sapphire substrates in 2013 will fall to around US$15.

In terms of large-size substrates, many international LED manufacturers have entered the era of 4K. Since mainland manufacturers started late, most of the epitaxial wafer factories still use 2 production lines, and substrate products are also concentrated in 2K. However, the Chinese mainland's epitaxial plant is still immature in terms of 4-inch process technology. In addition, upgrading and replacement require the equipment required for the wafer process to be reconfigured, and one-time investment is too large. Mainland manufacturers will not easily change the existing 2-inch production line to 4-inch production line. Under the consideration of demand-determining supply, the mainland sapphire substrate plant will not be put into production more than 4 inches in 2013. Only some of the more powerful substrate factories such as Chongqing Silian, etc., will conduct more than 4吋 substrate technology research and development under the policy support.

4, LED into the private electricity supplier platform into a springboard

Despite the global economic downturn in 2012, the mainland LED lighting civilian market has not reached scale, but the LED industry still maintains growth of more than 20%, mainly due to the intensive policy of the mainland government.

The Central Government of the Mainland has announced the LED development goals for the Twelfth Five-Year Plan in 2011. The relevant LED lighting clearly stated that by 2015 LED will enter the people's life. ? The market penetration rate reached 30%, and incandescent lamps were eliminated in 2015. Subsequently, in 2012, various ministries and commissions in mainland China successively introduced LED lighting development plans with different priorities.

Looking forward to 2013, due to continuous policies, municipal project release, and subsidy terminals, etc., will help continue to drive the domestic LED domestic market, escorting the mainland LED industry. The phase-out incandescent lamp roadmap with a longer span has entered the formal implementation stage on October 1, 2012. Although the second and third-tier cities still have individual malls selling banned incandescent lamps, most of the businesses and incandescent lamps Lamp manufacturers have begun to transform into sales and production of CCFL lamps and LED lamps. Over time, with the firm implementation of the incandescent lamp roadmap on the mainland, the market space for LED will become more and more extensive.

Although the current LED consumer market has not yet demonstrated tremendous demand, the huge population base of the mainland, as well as increased living standards, increased awareness of energy conservation, and recognition of high-tech products are highly respected, heralding the infinite potential of the civilian market. In order to win the market, many LED lighting manufacturers in mainland China have also laid out their channels. Among them, most of the traditional lighting manufacturers choose to cut into the LED channel from the original traditional channels, while emerging LED manufacturers tend to be more efficient, efficient, and low-cost e-commerce platforms. Tuo believes that with the improvement of the mainland e-commerce platform and the rapid increase in the number of users, in 2013, “ecommerce + LED” will be a better way for LED to enter the civilian market. No matter the emerging LED manufacturers or traditional lighting manufacturers, they will do their work on the e-commerce platform.

5, LED backlight land enterprises strengthen penetration

Since the Taiwan factory cut into the LED industry earlier, and combined with Taiwan's panel industry, LED backlight products account for a larger proportion. Looking back at the mainland, LED industry started late, and LED backlight products have higher requirements for device consistency. Therefore, mainland LED manufacturers choose to start from the lighting chip. The mainland LED backlight market is basically dominated by Taiwanese manufacturers. However, with the successive release of lighting products, mainland manufacturers have begun to expand into the field of LED backlighting. The "S-23 ABMUP LED backlight for LCD backlights" developed by Sanan Optoelectronics was recognized as a key new product by the Ministry of Science and Technology in 2012. This is the highest honor that the product has won in a series of awards that have been obtained. The mainland government attaches importance to the localization of LED backlight chips. It can be predicted that with the development of the mainland panel industry, China's LED backlight devices will also occupy a certain market in the future.

Mainland China panel maker BOE recently said that with the start-up of BOE Beijing 8.5 production line and the construction of Hefei 8.5-generation line, the demand for LED backlight modules will grow in line with panel production capacity. BOE hopes to acquire shares through In the past, there were high-quality LED manufacturers such as Dongbei Co., Ltd. and Co., Ltd., which entered the field of LED backlighting. However, for BOE with a background of central enterprises, it is very difficult to choose to invest in Taiwanese companies in the short term.