Many LED upstream chip companies have announced expansion plans
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Since the beginning of this year, many LED upstream chip companies have announced plans to expand production.
In the next two or three years, the number of companies that can survive in the LED chip industry is estimated to be no more than 10. Chen Wenyuan, formerly the general manager of Zhongdian Zhenhua Crystal Technology Co., Ltd., told the reporter of "High-tech LED". In this regard, Hou Huaibin, deputy general manager of Tongfang Optoelectronics Technology Co., Ltd., a LED chip company, also expressed similar views.
In Chen Wenyuan's view, many listed companies in the capital market have recently claimed to expand production capacity. In contrast, many small and medium-sized enterprises are reducing production capacity and even stopped production. The overall production capacity on the market surface is expanding, but more accurately it should be that the market is integrating production capacity, especially in the field of upstream epitaxial chips.
In the capital market, Sanan Optoelectronics plans to invest in the construction of LED epitaxial and chip R&D and manufacturing industrialization projects with a total investment of 10 billion yuan. Huacan Optoelectronics (300323.SZ) also announced plans to invest in the third phase of LED epitaxial chips. The total investment is 1.18 billion yuan. Secretary-General Ye Aimin said that the company has insufficient production capacity and will continue to expand production capacity at this stage and in the next two years. Not only listed companies, but some smaller companies have also expressed to reporters plans to continue expansion this year.
In response to this phenomenon, Chen Wenyuan has clearly pointed out the status quo of the industry: For most chip companies, not expanding production capacity is waiting for death, and expanding production capacity may not be dead. SMEs have already fallen into a dilemma.
This is because, with the prevalence of the price war in the LED industry, the price of LED products is already the price of the earth, and there is no profit at all. According to the statistics of the High-tech LED Industry Research Institute (GLII), the price of LED chips in China dropped by more than 30 from the beginning of 2012, and continued to fall by about 20 in 2013.
It is precisely because of the shrinking of industry profits that LED products enter the parity period, companies can only rely on the expansion of scale to gain more profits, which is why many companies are shouting to expand production capacity.
However, the expansion of production capacity must be supported by sufficient funds. Even if the company invests a lot of money, it will not be able to achieve the expected results. From the current situation, many companies do not have such strength, so some companies have also chosen to shrink or even stop production.
For SMEs, expanding production capacity at this time is meaningless. Chen Wenyuan said that in fact, the total production capacity of the industry is basically fixed. About 1000 MOCVD will not increase too much in the future, and the utilization rate is still not high.
There is no profit without expanding production capacity, and there is no capital for expanding production capacity. In fact, the embarrassment faced by SMEs is not only the case.
Chen Wenyuan said that in the epitaxial chip market, the cost of technicians and managers required to manage the factory accounts for the majority of the company's total cost. The cost of maintaining 10 machines is almost the same as the cost of maintaining hundreds of machines by Sanan Optoelectronics. In addition to the top five companies, there are only a few to a dozen other machines and equipment, there is no scale effect, the cost can not be reduced.
Moreover, many companies that have used epitaxial chips in the past are factory buildings that are configured on a scale of 50 to 60 units, so that the cost of daily maintenance of enterprises is also high. Chen Wenyuan said: Because everyone is ambitious and intends to do something big, the factory and the machine are all renovated according to large-scale, but then there will be more than a dozen scales. It is difficult for the enterprise to maintain the current large-scale state, which gives Businesses have created operational pressures.
The data provided by GLII shows that in 2012 China's MOCVD capacity utilization rate is only about 30, and the operating rate is only about 50. Although the demand for downstream lighting application market is driven by the demand of the downstream lighting application market in 2013, the MOCVD capacity utilization rate has risen to 52, and the operating rate has risen to around 70, but it is still insufficient. The huge machine depreciation loss has brought a heavy burden to the enterprise.
In addition, if these chip companies receive orders from some of the larger industry leaders, they will face 45 days to 3 months of delay after delivery, which will cause inconvenience to the chip companies' capital turnover, and may even lead to some The corporate capital chain was broken and was dragged down.