The industry has long predicted that the domestic LED chip market will have a maximum of 5-10 companies. It seems that this prediction is still too optimistic, and LED chip companies are required to save, but they are well versed in the martial arts. Fighting the scale and price has always been an important means to promote the development of domestic LED chip companies. However, in the case of overcapacity and price bottoming, the above method is obviously prone to failure. At this time, the poor will change and the change will pass. Nowadays, the LED chip industry has reached a critical moment of transformation. Chip companies must change their thinking from big to strong, from simple mass production to diversified layout, continuously strengthen technology, increase profit margin, and strengthen their own anti-risk ability. . Industry boom continues to increase In the past few years, prices have fallen sharply due to the release of new large-scale investment capacity in the LED chip industry. At the same time, in order to compete for market dominance, the irrational competition of market prices has caused many small and medium-sized chip companies to face continuous decline in product prices, resulting in continued losses. According to statistics, in 2015, the price of LED chips in China dropped by 30%-40%. The output value of upstream epitaxial chips increased by only 8.3% year-on-year, and the output value was 13 billion yuan. The growth rate slowed down noticeably. The fierce market competition will gradually eliminate the small and medium LED epitaxial chip enterprises, and the market concentration will be further improved. The top five chip companies in the industry account for 65% of the revenue. Chip makers such as Sanan Optoelectronics, Huacan Optoelectronics, Ganzhao Optoelectronics, Tongfang, and Dehao Runda account for nearly 70% of the domestic market. After the industry reshuffle in 2015, coupled with the 25% production capacity of Crystal Power at the beginning of the year, Samsung’s repeated production cuts, and the reduction of domestic subsidies for chip companies last year, the domestic new supply expansion of chips has fallen sharply, and has also changed to some extent. LED chip supply and demand structure, from the previous oversupply to supply and demand balance or even in short supply. Since the second quarter of last year, LED chip companies have continued to pick up. The prices of many LED chip companies in the industry have started to pick up and the revenue situation has improved significantly. Judging from the recently disclosed three quarterly reports, Sanan Optoelectronics achieved operating income of 4.486 billion yuan in the first three quarters, a year-on-year increase of 24.55%, and a net profit of 1.496 billion yuan, a year-on-year increase of 3.39%. Huacan Optoelectronics achieved operating income of 1.071 billion yuan from January to September 2016, a year-on-year increase of 53.22%, and net profit of 141 million yuan, an increase of 1478.77%. Not only have chip companies improved their profitability, but their capacity has continued to be full, confirming the current state of the industry. LED chip faucets such as Sanan, Huacan, Aoyang and many other LED chip companies are already full or almost close to full production. On October 19, Sanan Optoelectronics responded to investors' questions in the Shanghai Stock Exchange's SSE E-Interaction. The MOCVD equipment disclosed in the company's interim report was fully produced by the end of the year. The company's orders have monthly orders and quarterly orders. Book to the end of the year. At present, the price of LED chips is stable, and the price of some varieties has increased. Sanan Optoelectronics' 2016 semi-annual report shows that the company has about 276 sets of MOCVD equipment (converted into 2 inches and 54 pieces), and has already put into production of 256 sets, of which about 80 sets are gradually opened during the reporting period. Jingdian also said that because the demand for quaternary LEDs is still strong, and LED backlight applications are expected to enter the off-season in the fourth quarter, orders from Korean and mainland customers are still influx, and demand for smart phones and flash phones is growing at the same time. The challenge of full capacity in October will drive the fourth quarter operation to be better than expected. In the first half of the year, Huacan Optoelectronics signed a strategic cooperation agreement with its main customer, Mulinsen. The content mainly includes that Mulinsen will preferentially purchase the company's products under the same conditions. The amount of LED chip products purchased by Mulinsen from the company in the next three years will be no less than 15%. 100 million yuan. According to industry insiders, this market demand for LED chips will continue for three to five years. On the one hand, since October 1st, the domestic ban has been fully implemented, which will further accelerate the replacement of incandescent LED lighting fixtures, which will drive 60% of domestic LED lighting demand; on the other hand, the indoor and outdoor small-pitch LED market continues to be hot. The compound annual growth rate is 28%. In 2016, the demand will be more than 140 billion. In the next two years, there will still be nearly 40 billion new demand. The current small-pitch LED production capacity is about 70 billion, and the supply and demand gap is 50%.
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