The LED CHIP market has been a little bit cold, it's anxious that LED chip market will be slow in 2023. However, led chip industry insiders said that "the company is now entering the market too late" in the case of overcapacity, leading expansion, industry consolidation and increasingly important channels.
The earnings outlook for the epitaxial wafer led chip project was bleak. After this project is completed, the company will have LED epitaxial wafers and led chip production bases with advanced equipment and outstanding production efficiency. The construction period of the project is 30 months. After the project is completed and put into production, it will form an annual output of 1.8 million pieces of blue-green LED epitaxial wafers (calculated by 2-inch epitaxial wafers) and a production capacity of 11.5 billion blue-green chips.
However, since the market's crazy investment in the LED chip industry led to a serious excess of production capacity, the gross profit margin of LED chips dropped sharply, and many led chip companies suffered losses. The company's LED epitaxial wafer chip project also progressed slowly.
By the end of 2022, the company's LED project civil engineering project was fully completed and the relevant personnel were basically in place. The equipment ordered by the company was gradually delivered and installed. Only 5 sets of 5 MOCVD equipment have been ordered and are in installation and commissioning. The led chip company’s planned investment of 1 billion yuan has so far only fulfilled 100 million yuan.
"If you want to produce scale effects, the first batch of LED chip plants will have at least 60 or more, and the manufacturers will generally have more than 150 units - more than 200 units, and more Taiwanese manufacturers." The above-mentioned Beijing electronics industry analyst said that the company's current MOCVD equipment The quantity still can't produce scale effect. If we consider the depreciation and yield ramping again, we may encounter factors such as Sanan Optoelectronics and BDO Runda price warfare. “After a year, we can make good money”.
“It will take only half a year to adjust the machine. If the production of the chip is to reach a stable state, it will not be possible without a period of 2-3 years.” We need to dig a team, familiar with a certain type of machine, then the company will buy several of this type of MOCVD equipment.
Overcapacity clouds overshadowed, and the current situation of the LED chip market is not optimistic.
According to our previous investigation, the LED epitaxial wafer chip link belongs to the upstream of the LED industry. However, there are no technical barriers to LED chip manufacturing. Domestic MOCVD equipment required for chip manufacturers to produce LED chips is almost entirely imported from two overseas manufacturers. To establish a foothold in this market, there must be a sufficient number of MOCVD equipment and sufficient technical personnel.
Among the mainland manufacturers, after two years of development, we become the professional one in the field of LED chips.
According to data from a LED industry research agency, as of the end of 2022, the LED chip output accounted for 30% of export output.
“In the future, the LED chip market will become stronger and stronger, and scale effects and channels will become more and more important.” said the aforementioned senior analyst in the electronics industry in Beijing.
In addition, the Au-Shunchang LED epitaxial wafer chip project has not been completed, it will have to face the industry overcapacity crisis.
Due to the slow release of production capacity, LED chip prices have been falling all the way. In 2022, the average selling price of LED chips was 20% lower than the forecasted selling price of the raised investment projects. This led to the fact that the raised investment projects cannot achieve sales revenue in 2023.
Chip leader expand production busy. What is eyeing the LED chip market is not only the Australian Ocean Shunchang, the industry giants have also stepped up the pace of capacity expansion.
It is worth noting that the MOCVD subsidy policy introduced by local governments in the past two years has directly led to the emergence of new domestic LED epitaxial chip projects.
According to industry media reports, a total of 65 new LED epitaxial chip projects were established in China in 2009-2012, but due to the harsh market environment, more than 30% of the projects have now been withdrawn or put on hold.
Some industry analysts wrote a few days ago that the trend of polarization in the LED upstream chip industry has gradually emerged, and the industry has entered the survival period in advance.
Performance of LED lighting products continues to increase and prices continue to decline, the overall cost of lighting has approached traditional lighting. "In the next two to three years, only a few or more than a dozen MOCVD machine chip companies will be very difficult, unless the products are located in the market segment, or these small companies will soon be eliminated by the market."
"Securities Market Weekly" reporter turned to find the company secretary Lin Wenhua phone, first hang up, once again dial the past, the phone no answer. As of the press release, this reporter has not been able to contact other people within the company to comment on this.
