LED chip industry structure imbalance appears, industrial center transfer accelerated

Following the shortage and price increase of 2016 Q3 Quaternary LED chips and the increase of Quaternary LED production capacity of Taiwan factories, on January, 17, domestic LED chip leader Sanan Optoelectronics issued a price adjustment letter, raising the price of some white light products by 8, the price increase of LED chips spreads from RGB to white light. On the one hand, it reflects the structural imbalance of LED chips, that is, the price increase of LED chips in display applications and lighting applications spreads from RGB to white light, and the structural imbalance between supply and demand appears, following the shortage and price increase of 2016 Q3 Quaternary LED chips and the increase of Quaternary LED production capacity of Taiwan factories, on January, 17, domestic LED chip leader Sanan Optoelectronics issued a price adjustment letter, raising the price of some white light products by 8, the price increase of LED chips spreads from RGB to white light. This aspect reflects the structural imbalance of LED chips, that is, display applications and lighting applications compete for GaN blue-green chip capacity. On the other hand, it also reflects the strong demand in the downstream of the chip industry. According to the research feedback, the recent orders for white LED chips, packaging and lamps are in good condition, the industry is booming, and the profitability of enterprises is gradually repairing. Supply side: the crowding-out effect of price war is obvious, and the competition pattern of the industry is improved. According to statistics, the continuous production of LED chip factories in mainland China has made the proportion of LED chip oversupply in 15 years as high as 22, from 15Q1 to Q1 in 16 years, the price of mainstream LED chips has dropped by more than 30, and the price of packaged products has generally dropped by more than 20. According to the data of China Light Industry Network, the cumulative loss of the National Lighting industry in the first three quarters of 2015 was 16. 66, in contrast, the operating conditions of domestic-funded enterprises are better than those of foreign investors, Hong Kong, Macao and Taiwan Investment Enterprises. In this competitive environment of survival of the fittest, following Samsung's withdrawal from LED lighting business in all markets except South Korea in 2014, Philips, Osram and GE, internationally renowned manufacturers, have also withdrawn from the Chinese market in succession in 2016, it provides a larger market space for the domestic LED industry and improves the competition pattern of the industry. Taiwan factory focuses on the Quaternary chip market, and the transfer of GaNLED industry center to the mainland is accelerating. Due to the rise of small spacing and IR sensing applications, Taiwanese Quaternary LED manufacturers are actively expanding Quaternary capacity: jingdian implemented the expansion plan from 16Q2, and Huashang Optoelectronics concentrated its production capacity in four yuan in 16 years. At the same time, Jingdian and Cree began to reduce GaN production capacity in 16 years, while major domestic factories began to invest GaN production lines this year, considering the purchase and commissioning cycles of equipment, in the whole year, about 135 new MOCVD units were invested by local chip manufacturers. Considering the withdrawal of about 125 units of crystal power equipment, the number of new equipment in 17 years was limited, and the domestic growth was less. On the one hand, due to the need for 2 times the blue-green capacity to match the red-yellow capacity in the full-color display, on the other hand, due to the withdrawal of major international manufacturers, it provides more domestic alternative space for downstream lighting manufacturers, the progress of local manufacturers to undertake the transfer of GaNLED industrial centers has accelerated. Demand side: Small spacing, Micro- LED, IR and lamp markets are on the rise, and lighting projects are welcome to develop. In the demand structure of domestic LED industry, general lighting accounted for 47. 5% in 2016. 6, landscape lighting accounted for 13. 5, backlight application accounted for 12. 1, the display accounted for 12. 8, car lighting accounted for 1. 4. Referring to the growth rate in the past two years, assume that the growth rate of general lighting in 17 years is 15, the growth rate of landscape lighting is 7, the growth rate of small-pitch LED is 70, and the display screen (Except for small spacing) Growth rate 4, vehicle growth rate 6, the domestic LED industry demand growth rate of about 10. 44. Considering the impact of the 15-year decline in LED product prices, the growth rate of demand should be higher than the growth rate of output value. Accompanied by small-pitch LED, Micro- The rise of LED, IR and lamp markets and the good development opportunities of lighting projects under the financial expansion cycle are accelerating the growth rate of LED demand, in 17 years, only small-pitch LED needs to add about 26 MOCVD equipment. The demand for replenishment of inventory is determined, and the LED industry, a leading manufacturer, has entered the stage of inventory digestion since 2012. According to the data of Shenwan LED plate, the number of inventory turnover days in the industry has increased from 117 since 15Q3. 94 days to 16Q3 102. 92 days, at the low level since 2009Q3, the new round of replenishment demand in the future will push up the industry's prosperity. In addition, we believe that the expulsion of bad money is happening on the demand side. When the price of LED bulbs drops to the comfort zone of consumers, benefiting from the upgrading of consumption, the ability of some small and medium-sized manufacturers to enhance their purchase intention through price differences decreases, and the profit model of small profits but quick turnover is challenged, the phenomenon of small profits and less sales will increase the competitive pressure of some small and medium-sized manufacturers from the demand side, accelerate the industry reshuffle, and benefit leading manufacturers. Suggested attention: Sanan Optoelectronics (Full color LED chip faucet), Dry light photoelectric (Domestic four-element LED chip faucet), Mulinsen (Domestic LED chip packaging faucet), Jufei Optoelectronics (Domestic LED backlight module faucet)Liad (Domestic LED display, lighting engineering faucet)Zhou Ming technology, etc. Risk Warning: the growth rate of downstream emerging applications is lower than expected, and the domestic replacement speed of GaN chips is lower than expected.