LED is now the most valued industry in the lighting industry, and there are many concerns and concerns behind its development.
Market expansion: a powerful catalyst for enterprise expansion
At the beginning of 2010, the LED market in the capital market was heated up. The two leading companies in the industry, Silan Micro and Sanan Optoelectronics, have announced large-scale expansion of LED chips, and the pace of scale expansion has accelerated significantly. Among them, Silan Micro has raised more than 600 million yuan through private placement, mainly for high-brightness LED chip production line expansion projects. At that time, its LED chips will increase by 7.2 billion to 13.2 billion per year, and the annual production capacity of epitaxial wafers will increase. 420,000 to 570,000. Subsequently, the expansion plan announced by Sanan Optoelectronics was even more ambitious. The LED industrialization base jointly established with the Wuhu Municipal Government not only engaged in the research and development of LED epitaxial wafers and chips, but also extended to the downstream R&D and manufacturing of packaging and application products. The total investment is as high as 12 billion yuan, and the investment in the first phase is 6 billion yuan. The total construction period is 4 years.
And many upstream and downstream companies and even foreign companies are eager to take a slice of the rapid development of LED. For example, the main business of Dazu Laser and Dehao Runda is not related to LED. It has only been involved in the application and packaging fields through mergers and acquisitions, and has also expanded the scale of investment and extended to the upstream and downstream of the industrial chain.
Taking the large-scale expansion of Sanan Optoelectronics as an example, although the 12 billion-scale industrial base in Wuhu has caused a lot of controversy, Lin Xiucheng, chairman of Sanan Optoelectronics, is still very confident in interviews. "The development of LED is earlier and faster than imagined," he said, and for the Chinese market, the opportunity will be even greater.
Lin Xiucheng’s optimism is not without reason. The growth of applications including backlight display and lighting in 2009 has been proven and responsive, and is considered by industry insiders to be the two main reasons for the 2010 market outbreak.
According to the statistics of Ledinside and Great Wall Securities Research Institute, the two major application areas of LED output value in China in 2008 are landscape lighting (37%) and liquid crystal display backlight (28%). According to the National Semiconductor Lighting Engineering R&D and Industry Alliance statistics, in 2008, in China's LED industry chain, the output value of the packaging field reached 18.5 billion yuan, an increase of 10% compared with the 16.8 billion yuan in 2007; the output was 820 in 2007. 100 million yuan increased by 15% to 94 billion, of which the output value of high-brightness LED reached 14 billion yuan, accounting for 76% of total LED sales; its important market application is as a backlight for LCD liquid crystal display.
In an interview with reporters, many industry insiders pointed out that with the improvement of LED luminous efficiency, cost reduction and implementation of environmental protection policies, LEDs are gradually increasing in the proportion of backlights such as LCD TVs, LCD monitors and notebook computers. Medium and large size display backlights will promote the rapid growth of the LED industry in 2010. According to Liu Liang, an analyst at Industrial Securities, the number of LED chips required for LCD TV and notebook backlighting in 2010 was 30 billion and 6 billion, respectively.
At present, many home appliance faucets at home and abroad have noticed this trend, and have already been in the upstream to ensure the supply of LED backlights. Among them, China Skyworth and Konka have both invested in a large private LED packaging factory in Shenzhen, with a strategic investment amount of tens of millions.
In the field of lighting, according to the "Opinions on the Development of Semiconductor Lighting Energy-Saving Industry", by 2015, the penetration rate of LED products in functional lighting, LCD backlight, landscape decoration and other markets will reach 20%, 50% and 70% respectively. The semiconductor lighting energy-saving industry has grown at an average annual rate of 30%.
The battle for the pattern: mergers and acquisitions and expansion
Although the expanding market demand has accelerated the scale of enterprises, in the entire LED industry chain, the current expansion of production is generally concentrated in the upstream sector, especially for some powerful listed companies, which also has a unique profit distribution with this industry. The structure is not relevant.
It is reported that the LED industry is generally divided into upper, middle and lower reaches according to epitaxial wafer and chip manufacturing, device packaging and LED application; among them, epitaxial wafer and chip manufacturing are the core of LED industry chain, and also the highest value-added link, which is typical technology. Or capital-intensive “three high†industries: the middle and lower reaches of the packaging and application barriers are low, belonging to labor-intensive industries. According to the statistics of Great Wall Securities, in the LED industry chain, LED epitaxial wafers and chips account for about 70% of the industry's profits, LED packaging accounts for about 10 to 20%, and LED applications account for about 10 to 20%.
Therefore, companies such as Dehao Runda, which were originally involved in the application and packaging fields only through mergers and acquisitions, also intend to venture into the upstream of the industry through private placement and increase profit margins. Guoxin Securities analyst Wang Nianchun pointed out: In terms of the current strength of Dehao Runda, it does not have the technology and production capacity of LED chip manufacturing. It is expected that it may accelerate the intervention in LED chip manufacturing by acquiring related companies. This is also an effective means for companies outside the industry to get involved in the LED field.
However, it is worth noting that although upstream chips are in short supply, domestic companies do not have technological advantages, especially in areas such as large-size backlights and high-power lighting, where products are not competitive.
Relatively speaking, the package is much better, which is also in line with the global LED industry transfer trend. Since the 1990s, the technical threshold has not been high, and the labor-intensive LED packaging industry has taken the lead in transferring to mainland China, Taiwan, and South Korea. It is estimated that China's current packaging capacity (including foreign-funded factories in mainland China) accounts for about 40% of the world's packaging capacity, and as the concentration of LED industry in China increases, this proportion is still rising. In addition, the packaging capacity expansion of mainland LED packaging companies is also accelerating.
But the problem is that these packaging companies are not only numerous but also very fragmented, and the industry concentration is not high. And currently, among the LED-related listed companies, there is not a listed company whose main business is packaging. Zhang Xiaofei, CEO of Gaogong LED, pointed out that at present, overseas LED companies, especially Taiwan, are entering on a large scale and are on the mainland from north to south. The pressure on domestic counterparts is very high. In addition, although domestic enterprises have geographical advantages, they are more reluctant to cooperate with each other. He said that he had intentionally promoted the cooperation of the two packaging companies, but eventually it was aborted. As a result, in a short period of time, it is difficult for the mainland to produce large enterprises that can compete with international giants.
However, the LED industry will inevitably move toward intensification. According to the National Opinions on the Development of Semiconductor Lighting Energy-Saving Industry, by 2015, 3 to 5 upstream chip-scale production enterprises will be formed; the industrial concentration will be significantly improved, and about 10 leading enterprises with independent brands and large market influence will be formed. The pattern.
Nowadays, the scale expansion of some powerful enterprises is an effective attempt. Liu Liang told reporters that this is manifested in the global extension of the bottleneck of the upstream chip manufacturing and other industrial chain, as well as the expansion of the specific application market downstream. The latter, such as Silan Micro, has a certain market position in the chip field, and is also planning to enter the field of packaging and outdoor screens. Wang Ying, an analyst at the Sadie Consulting Semiconductor Industry Research Center, pointed out that downstream to the upstream is more difficult, and the capital and technology thresholds are relatively high, but companies may choose such mergers and acquisitions to ensure the supply of raw materials; It will make the company's overall profitability higher. In addition, there are also some companies outside the industry to conduct cross-business mergers and acquisitions, such as Dehao Runda, mostly optimistic about the development opportunities of the LED industry.
With the outbreak of the industry, LED companies are now attracting a lot of attention from VCs and PE capital, but they are also relatively cautious. It can be said that the pattern of the entire industry is still chaotic. However, the trend of mergers and acquisitions is gradually becoming obvious.
Puzzle of life and death: talent, core technology and grey areas
During the interview, many professionals are very optimistic about the industry prospects of China's LED industry, especially to affirm its development potential and market value. However, for the madness of the corresponding sectors in the capital market, there are still many flaws in the domestic LED industry that are difficult to overcome in the short term. The capital market reflects a strong reaction to the early realization of the benefits. At the same time, there is no shortage of fish in the industry, borrowing concepts and speculation to take advantage of it.
However, industry experts also believe that the lack of core technology, talents, standards, and funds make investors look at the LED industry should not be overly optimistic. According to industry sources: the implementation of the "Ten Cities and Ten Thousands" to promote the popularization of LED lighting for more than a year, the estimated number is too large; according to the Ministry of Science and Technology planning, this year will be added to the "50 cities 2 million ç›", but because of the relevant Subsidies and financial concessions have not been clarified, which has weakened the desire of other cities to join. On the other hand, due to the lack of lighting standards, many cities have revealed local protection tendencies in bidding, so that the industry must calmly view the plan for relevant LED companies. enhancement.
The inconsistency of standards indulges local protection and creates a grey area, which also breeds a lot of unfair competition; and the more local standards, the more difficult it is to unify. Such a situation is difficult to reverse. However, with the improvement of the industry, some subdivision standards are gradually being established.
In addition to policies, the lack of core technical talents and MOCVD equipment in the upper reaches of higher-margin industries has also hindered the expansion of enterprises. The industry generally has a positive attitude towards the growth of the domestic outdoor display, lighting and backlight display market in 2010. The expansion of Silan Micro and Sanan Optoelectronics has also been related to gaining market share in these areas. But at the same time, whether talents and equipment can be in place is a key factor in whether companies can seize market opportunities. It is understood that Sanan Optoelectronics has been able to guarantee the delivery of 100 MOCVD equipment in 2011, and to a certain extent has obtained the priority purchase right of the equipment; for the listed companies such as Dehao Runda and M&A involved in LED, analysts The performance of LED performance is cautious.
For the more core high-tech talents, most companies are currently introducing them from overseas or Taiwan, and then training and accumulating technical talents. It is also the barrier of industrialized high-tech talent brought by high-tech high threshold, which has become the bottleneck that restricts the rapid growth of many LED upstream enterprises. Statistics show that there are about 800,000 LED engineers in China, most of which are imported from overseas or Taiwan, and there is a gap of 600,000.
Taking Sanan Optoelectronics as an example, the company has established a research and development team consisting of top talents in Taiwan, Japan, the United States and domestic optoelectronic technology. Not only does it employ a large number of returnees, but also self-cultivating talents will be stationed abroad for study and study; The cultivation requires a long period of time and high cost, but it also builds a high talent barrier for new entrants in the industry.
From the perspective of the company, regardless of its own conditions, talents are not enough, and even the situation of competing in the Red Sea in the future, it is no match for the determination of enterprises to occupy a seat in the market. Therefore, in the case that many technologies have not passed the customs and the standards have not been issued, various projects have been launched. He pointed out that this kind of chaos also means "fire" to some extent. When the future market cannot accommodate it, there will naturally be a process of shuffling; in the end, the enterprises that can survive will have benefits at the moment. support. But this situation may not appear until 2011. Jingguan LED companies in the face of such a market and the status quo to give us what kind of surprise. (Edit: Led Fish)
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