GLII: LED investment bid farewell to "for the upstream"

[Source: "High- tech LED - Research and Review" April issue] According to statistics from the High-tech LED Industry Research Institute (GLII), China's LED industry planning investment in the first quarter of 2012 reached 14.1 billion yuan, down 60% year-on-year. Drop by 70%. There are indications that the current VC/PE (risk investment/private equity) funds or industrial capital investment in the LED industry is slowing down.

Yu Bin, a senior analyst at the High-tech LED Industry Research Institute, pointed out that the total investment in the LED industry in the first quarter of this year hit a new low since 2010, compared with a decrease of 49.2 billion yuan in the first quarter of 2010. From the perspective of segmentation, LED lighting applications have become the mainstream of investment, accounting for 49% of the total investment in terms of investment scale.

As far as investment is concerned, the highest temperature period for capital investment in the LED industry has passed. Although the number of investment events and investment amounts in the LED industry in 2010 have reached record highs, and related investments have earned the eye of capital, this kind of hot situation may not be sustainable in 2012.

Considering the lack of confidence in the LED-related listed companies in the secondary market, and the fact that there are some mixed phenomena in the industry, the investment of LEDs in the future will be more cautious, and the investment will gradually become rational from the madness of the era of staking. LED companies rely on a single profit model to be in jeopardy, and need to participate more actively in the integration of industry chain resources in the future.

Industry insiders generally expect that the development of China's LED industry in 2012 may have entered a consolidation period, and it is predicted that there will be certain structural adjustments in the market. However, as the penetration rate of LED lighting applications continues to rise in the future, it is predicted that more and more investment institutions or industrial capital will participate in the LED industry investment.

For the future investment hotspots, the Gaogong LED Industry Research Institute believes that in 2012, the LED industry with the unique production process of the upper and middle reaches research and development, "light" asset model lighting solution design, special materials or accessories R & D and manufacturing Will be favored by capital to varying degrees.

With the gradual release of the LED terminal application market demand, the development of the LED industry chain will enter the integration period, and will not regress or shrink due to the reduction of investment enthusiasm.

The Gaogong LED Industry Research Institute believes that after the industry investment in the first quarter is low, it is predicted that the investment scale will increase in the second quarter. If LED companies re-emerge in intensive IPOs in the second quarter, the industry investment activity in the second half of this year will also rebound, but compared with the same period in 2010, the market environment has undergone a fundamental change. Under the prudent investment atmosphere, China's LED industry will It is difficult to reproduce the original "hot" scene.

Upstream investment tends to be rational

According to the statistics of the High-tech LED Industry Research Institute (GLII), the investment in LED epitaxial chips and sapphire in China in the first quarter of 2012 accounted for only 13%.

“The investment in the upstream of L ED began to become rational this year.” Dong Zhijiang of Wuhan Diyuan Optoelectronics Technology Co., Ltd. expressed his opinion on “High-tech LED”.

In the first two years, a large number of domestic LED upstream manufacturers, including Sanan Optoelectronics and Dehao Runda, almost all rushed to purchase MOCVD equipment with huge amounts of cash, and each order was hundreds of units.

“The reason why the first two years were so hot is because the purchase of MOCVD can get government subsidies.” Dong Zhijiang said that it turned out to be a violation of market rules and interference with the normal order of the market.

Li Xiao, senior vice president of BOE, said that investing in chips requires the first tough intellectual property negotiations, the second requires a lot of money, and the third requires very complicated equipment. In addition to having a certain financial strength, there are many other bottlenecks to overcome. From the perspective of BOE, even with such a policy, it will not easily move upstream. After all, the upstream technical barriers and financial barriers are too large. "There may also be a suitable cooperation with the upstream in the future."

Since the second half of 2011, the MOCVD boom has come to an abrupt end, and upstream companies have begun to delay MOCVD orders, resulting in a sudden increase in AIXTRON and VEECO inventory. According to AIXTRON's 2011 financial report data, the company's inventory has reached 200 million euros.

Zhang Qinglin, director of technical support for VEECO Greater China, revealed that the wait-and-see mood of customers is relatively strong, and the inquiries of new customers have increased compared with the second half of last year, but most of the demand is only a few MOCVD.

“Inventories are slowly digesting since the first quarter of this year,” Zhang Qinglin said.

Recently, Aoyang Shunchang (002245.SZ) purchased 5 MOCVD equipment from AIXTRON. “This is the first batch of MOCVD equipment we have subscribed to.” Chen Hao, Chairman of Aoyang Shunchang, told Gaogong LED that in addition to purchasing 5 MOCVD equipment from AIXTRON, it is expected to purchase 5 MOCVD equipment this year. Up to 10 units. According to the overall plan of Aoyang Shunchang, the total number of MOCVD equipment will reach 30 or so.

"We are also actively engaging with VEECO." Chen Yu said. Zhang Qinglin revealed that the current level of inquiries from such customers as Aoyang Shunchang is improving.

Chen Wei said that now is the last round of opportunities for the Chinese LED industry. If you do not enter, the opportunities for future entry may not be much.

“The rate of downstream demand release is not as good as expected, but there is still a certain amount of growth every year. The orders we got this year are better than last year.” Dong Zhijiang said that Diyuan Optoelectronics did not join the wave of crazy MOCVD investment boom. Instead, the company will expand its production according to the original plan. “The company currently has 14 MOCVD equipment. In line with market demand, we plan to double capacity this year to 50,000 pieces/month.”

Packaging order picks up

In 2011, LED packaging companies collectively exerted their strength in the capital market. According to statistics from the High-tech LED Industry Research Institute (GLII), there have been four LED packaging companies in China achieving IPOs in the A-share market since 2011, with a cumulative financing amount of 1.921 billion yuan.

"The direct result of LED enterprise listing financing is likely to be overcapacity." Zhang Hongbiao, research director of Gaogong LED Industry Research Institute, pointed out that in 2011, domestic LED package production increased by more than 50%, and the price dropped by about 25%.

“The investment boom last year led to fierce competition and closed down some of the packaging companies, but most of the failures were newcomers last year, and the tens of millions of production capacity basically did not close.” Zhang Hongbiao said that the competition for packaging companies will be concentrated in medium-sized this year. enterprise. At the same time, the overall output value of the package will still show an increasing trend.

Judging from the current annual report of LED packaging listed companies, the net profit in 2011 has generally declined. In this regard, most companies report that LED industry investment has grown on a large scale, and the growth of the terminal application market is far less than expected due to the international financial situation, resulting in an imbalance between supply and demand, and more intense market competition, resulting in a decline in product sales gross profit.

As of the first quarter of 2012, the statistics of the High-tech LED Industry Research Institute (GLII) show that more than half of the LED packaging companies forecast a net profit of nearly 30% in the first quarter, compared with the same period last year, Ruifeng Optoelectronics has the largest decline, 40.83%-60.56 %.

"In March this year, the company's orders have increased significantly. At present, the company's production capacity has been unable to meet the demand for orders." Rui Wei Optoelectronics (300241.SZ) Chairman Gong Weibin recently revealed to "High-tech LED".

Ruifeng Optoelectronics' order growth is not a case in the domestic packaging field. Recently, Li Zhijiang, chairman of Wanrun Technology (002654.SZ), disclosed that "High-tech LED" has disclosed that the company has booked nearly 100 million yuan of packaging equipment to cope with the follow-up market. New demand.

Insiders pointed out that the LED market is changing rapidly. Since the third quarter of last year, the overall situation of the industry has been very bad until the end of February this year. But in March, the packaging industry began to pick up significantly. The industry is also optimistic about the future trend of the LED packaging industry. It is expected that the performance of the industry in the second half will be better than the first half.

According to the statistics of the High-tech LED Industry Research Institute (GLII), the investment in LED packaging planning in the first quarter of this year accounted for 29%. In 2011, the annual domestic package planning investment amounted to 18.999 billion, accounting for only 10%.


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