The situation of LED chip market is severe

The LED market has been warming up a bit, and Auchan Shunchang, which does distribution of metal logistics, has been anxious to announce that it will raise 500 million yuan to accelerate its entry into the LED chip market. However, some 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 chip project was bleak. “Ouyang Shunchang is coming in too late,” said a senior analyst in the electronics industry at a large brokerage company in Beijing. He commented on the LED epitaxial wafer chip project launched by Aucom Shunchang.

According to statistics, the principal business of Ausco Shun Cheung is the processing of metal materials and micro loan business. In 2012, the company's metal logistics distribution business revenue reached 1.627 billion yuan, but its gross profit margin was only 9.41%, contributing 153 million yuan in profits. The company's microfinance business contributed 95.39 million yuan in operating income and 8.54 million yuan in profits.

On June 4, the company announced that it plans to issue no more than 100 million shares at a price of no less than 5.12 yuan per share, raising no more than 512 million yuan for LED epitaxial wafer and chip industrialization projects (phase 1) and additional liquidity. .

After the project is completed, the company will have LED epitaxial wafers and 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.

According to the reporter’s understanding, as early as April 2011, the company announced that the total planned investment was RMB 1 billion to enter the LED epitaxial chip industry and that it would not be later than the second quarter of 2012. 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 companies suffered losses. The company's LED epitaxial wafer chip project also progressed slowly.

By the end of 2012, 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 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.” A Shenzhen-based senior LED analyst told reporters that if it wants to achieve profitability, the company Need to dig a team, familiar with a certain type of machine, then the company will buy several of this type of MOCVD equipment.

However, the Australian Ocean Shunchang had previously disclosed in the annual report, the company has already purchased two MOCVD equipment in 2011, and has reserves for MOCVD technicians.

The reporter called the Australian Ocean Shunchang to address this issue. A woman in the securities department of the company stated that both the secretaries and the witnesses are on business trips and it is inconvenient to give contact information.

Overcapacity clouds overshadowed. For the Australian Ocean Shunchang, 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, Sanan Optoelectronics has become the only one in the field of LED chips.

According to data from a LED industry research agency, as of the end of 2012, the LED chip output of Sanan Optoelectronics accounted for 40% of the entire industry output, Huacan Optoelectronics, Qianzhao Optoelectronics, Silan Microelectronics and Shilan Mingxin. Shanghai's cumulative blue light output was only 22%.

In addition, Sanan Optoelectronics has also become the first domestic chip manufacturer with more than 100 MOCVD equipment. It is estimated that in 2013, Sanan Optoelectronics MOCVD equipment will reach 174 sets, and the second will be far behind.

“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.

According to statistics from an industry research organization, as of the end of 2012, the number of MOCVD equipment in China had exceeded 900, but in 2012, the utilization rate of MOCVD in China was less than 50%.

Another large-scale LED chip manufacturer, Silan Micro, was considered by the industry insiders to be a “preceding lesson” for Osun Shunchang.

Due to the slow release of production capacity, LED chip prices have been falling all the way. In 2012, the average selling price of Shilan Mingxin LED chips from Silan Micro was 48.04% lower than the forecasted selling price of the raised investment projects. This led to the fact that in 2012, although the raised investment projects achieved sales revenue of RMB 116 million, the profit after income tax The loss is still 14.09 million yuan.

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. Recently, Shi Lanwei, the general manager of Shilan Mingxin Jiang Zhongyong publicly declared that the current production capacity of Shilan Mingxin is 1400 kk/month, and the display chip accounts for 80%. In 2013, the company will continue to expand production. By the end of the year, the production capacity will reach 2000 kk/month. By that time, the proportion of lighting chips will increase to 30%-40%.

On May 27th, Sanan Optoelectronics announced that it plans to raise funds not exceeding 3.3 billion yuan, of which no more than 2.8 billion yuan will be invested in the Wuhu Optoelectronics Industrialization (Phase II) project.

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.

Zhang Xiaofei, director of the Institute of High Industrial and Industrial Research, publicly stated that as the 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.