China's LED chip industry enters the post-price war era


[Introduction] Under the chaos of oversupply, underutilization, and increase in profits, it is gestating a new round of market changes. Domestic companies hope to use the time of 1~2 years to increase the luminous efficiency of current LED chips by 30~50, and the brightness of light reaches more than 200lm. Increased penetration rate of domestic LED chips In the market, domestic chip manufacturers have stepped up their acceptance of domestic chips by the high cost performance. Since 2009, China's LED epitaxial chip industry has developed rapidly due to strong domestic government policy support and huge display, backlight and lighting markets. The number of MOCVD machines for major production equipment has grown rapidly, from 130 units in 2009 to 917 units at the end of 2012.
In 2013, due to the rapid development of the lighting market, the production capacity of the LED industry in the upper, middle and lower reaches of the LED industry has slowed down the overcapacity in the second half of 2011 to a certain extent, and the industry has begun to pick up. The capacity utilization rate of the upstream epitaxial chip field has also increased from less than 30% in 2012 to the current average of nearly 60%. In the market, as the backlight market gradually becomes saturated in the next few years, demand will show a steady growth trend, and the next market growth point will come from the lighting market. Since 2011, the domestic lighting market has begun to gradually increase, and by 2013, the lighting market demand has begun to increase significantly. It is expected that in the next few years, the lighting market will become the market segment where upstream epitaxial chip manufacturers benefit the most. In the long-term environment of the lighting market, domestic chip manufacturers have also increased the level of chip manufacturing technology by continuously introducing technology, talents and increasing investment in research and development, and stepped up the packaging factory in the market with high cost performance. The acceptance of domestic chips has drawn more and more market share. For example, in the field of indoor lighting and commercial lighting, the replacement speed of domestic chips is very fast. Recently, the person in charge of the domestic packaging factory said: In the past two years, many large companies have not specified which chip to use, as long as the chip quality is good, it is acceptable. I remember that three or four years ago, 80 chips were purchased from Taiwan or foreign brands. Now, the chips are purchased, and 90 are all purchasing Chinese mainland chips. There have even been cases where customers have taken the initiative to request a brand of chips from the mainland. Incremental growth does not increase the strange phenomenon This year, equipment market demand growth is stable, but due to the continued decline in prices, resulting in no significant increase in overall equipment sales.
Benefiting from the overall recovery of the global economy and the pull of the terminal lighting market, the overall operating conditions of the domestic LED industry changed significantly in the first three quarters of 2013 compared with the same period last year. However, due to the impact of the downward trend in the downstream market price and the intensified competition in the industry, upstream chip manufacturers have fallen into the predicament of falling profit margins and not increasing profits. In the analysis of the reasons, the price of the upstream chip is mainly due to the rapid expansion of production capacity caused by excessive investment in the past few years, and the market cannot be completely digested. The high inventory caused by oversupply is the root cause of the sharp price drop of the chip. In view of market price pressures, manufacturers have to sell chips that were previously produced at high cost at a lower price, which affects the gross profit margin of enterprises, and ultimately leads to an increase in revenue. Not only the upstream chip segment, but also meager profits or even unprofitable phenomena are spreading in downstream lighting and the upstream equipment industry. Take North Microelectronics Co., Ltd. as an example. Although the overall demand for equipment in the market has grown steadily, the company's equipment sales have grown rapidly. However, due to the continuous decline in prices, the overall sales of equipment has been comparable to the same period of the previous year.
Under the chaos of industries such as oversupply, insufficient utilization, and no increase in profits, a new round of market changes is being fostered. Since the beginning of this year, there have been frequent incidents of expansion, mergers and acquisitions and even closures in the industry. The upstream chip industry has begun to show signs of consolidation. In the future, China’s LED situation will be changed from a decade of war to a three-nation. As a result of industrial integration, industry resources are increasingly concentrated in advantageous enterprises. In the field of LED upstream epitaxial chips, the market structure led by several leading companies will be formed in the future. The current product homogeneity is serious, but in the long run, it is only a short-term behavior for companies to obtain market prices through price wars. The recent phenomenon of frequent mergers and acquisitions among enterprises is also a necessary process for the elimination of backward production capacity, backward technology and backward management. After the integration period is three-dimensional competition, the future customer demand will no longer be the original plane, single, but will evolve into a multi-dimensional, three-dimensional demand.
Judging from the third quarterly report of the 2013 LED upstream listed companies recently released by major media, the situation of mainstream chip manufacturers has been greatly improved compared with the same period of last year, and the price decline of chips has also narrowed. The quarter is flat. The person in charge of a well-known domestic chip company believes that the price of the chip will neither rise nor fall too much. The chip industry is about to enter an era of product performance competition. Entrepreneurs in the industry are not afraid of the technical war after the price war. They believe that the current LED chips are far from the theoretical luminous effect. Many companies in China, including foreign companies, are doing some deeper technical research and development. Domestic companies hope to use the time of 1~2 years to increase the luminous efficiency of current LED chips by 30~50, and the brightness of light reaches more than 200lm. They also believe that technical warfare is the time to really fight for the strength of the enterprise, because research and development requires a lot of investment. At this stage, if many companies fail to keep up, they can only hope to stimulate the demand by generating other alternative products downstream.
In fact, after years of ups and downs in the market, companies that have finally settled down in the industrial chain will become more mature and rational. This attitude is especially valuable to the lighting market. After all, it can withstand time-tested and reliable products. In order to finally win customers. Going back to the upstream of the industry chain, although the effect of price cuts on customers is still straightforward, price cuts are no longer the only reason for downstream customers to pay. In addition to price, performance and reliability, and even the brand are important factors for customer consideration. It is not difficult to see that the future customer demand will no longer be the original flat, single, but will evolve into a multi-dimensional, three-dimensional demand. As the company itself, finding the balance between the best profit and the best service is the best way to impress customers. Perhaps we can think that the domestic LED chip market after the price war era is slowly turning around and coming on the scene. Technology upgrades need to lay out a generation of devices in advance, which will require a generation of processes, a generation of equipment, equipment companies to bring long-term value to customers with a step-by-step process solution.

Secondary Element Fertilizer

Agriculture Fertilizer Fuctional Fertilizer for crops yield,improve crops production.
Rice fertilizer,banana fertilizer,mango fertilizer,dragon fruit fertilizer,maize fertilizer,rose fertilizer.
Water Soluble Compound Fertilizer contains Secondary Element Fertilizer,Ca fertilizer,Mg fertilizer,S fertilizer.

Fertilizer customized service is available according to your need (production target,crops type,soil condition,climite,etc).

We have Top R&D team,strictly quality control,good supplied in time.

High Performance-Price Ratio Fertilizer Products.

Secondary Nutrient Soluble Fertilizer,Secondary Element Fertilizer,Ca fertilizer,Mg fertilizer,S fertilizer

Hebei Monband Water Soluble Fertilizer Co., Ltd. , https://www.wsfertilizer.com