LED lighting industry opens golden year of development

China will be an important producer of LED lighting. From the cost structure of LED lighting products, it is mainly composed of LED light source, PCB board, driving IC, heat sink and optical lens. In addition to driving IC, china has very strong competitiveness. In terms of core LED light sources, domestic manufacturers have traditional advantages in the packaging field, and the chip field has been internationally competitive since 2012. We believe that in LED lighting manufacturing, Chinese manufacturers will dominate the industry, just as Chinese manufacturers master more than 80 energy-saving lamp manufacturing. According to the agency's estimate, the growth rate of domestic LED indoor lighting will be 87 in 2013. We believe that LED indoor lighting is in a continuous application and popularization stage. It is estimated that 2014- In 15 years, the growth rate of domestic LED indoor lighting was 65 and 43 respectively. It is expected that there will be a follow-up policy for the subsidy for LED energy-saving lighting in 2012. From what we know, the actual effect of the subsidy in 2012 is not good, and most companies have not completed the promotion task. LED lighting subsidies in 2013 have actually been delayed. We estimate that there is a relatively high probability of launch in the first half of 2014, especially in the first quarter. Compared with energy-saving lamps, LED is showing more and more obvious environmental and economic characteristics. We estimate that the subsidy policy for energy-saving lighting in 2014 may be inclined to LED. Industry boom: upstream recovery, middle and downstream stability, investment enthusiasm: downstream? Midstream? After the Upstream 2010, due to the decline in the prosperity of the LED industry, the newly-added planned investment in the domestic LED industry showed a downward trend. According to the statistical analysis of the organization, the new investment in the industry in the first half of 2013 was 37 billion yuan, down from the first half of 2012. In 2013, the investment hotspot of LED industry has shifted from the upstream Sapphire and epitaxial chip fields in the previous two years to downstream applications, especially lighting applications. Institutional statistics show that in the first half of 2013, the proportion of LED application investment in new planning investment was 23. 2 billion, of which was invested in lighting application, accounting for of the total new planning investment. The investment orientation in the first half of 2013 reflects the difference in return on investment in different fields under the current environment. Is it still downstream? Midstream? Upstream. According to our estimation, the marginal ROE of major manufacturers in LED lighting application and packaging field is obviously higher than 20, and their expansion attitude is positive, while the ROE in chip field is lower than that in packaging and application field, investment enthusiasm is relatively low. Industrial capital itself is profitable. From the perspective of capital investment, industrial capital is relatively more optimistic about downstream lighting applications. Epitaxial chips: profits are rising at the bottom, and the demand for chips in the mainland industry has increased steadily, but it is obviously concentrated in the mainland. According to the electronic Times's estimate in December 2013, the output value of high-brightness LED will reach 127 in 2014. $0. 4 billion, an increase of 12. 9. The application products that drive the growth momentum of the industry are LED lighting, tablet computers, mobile devices, vehicles, etc. Based on the number of LED users, the annual growth rate will be 64. 2, 36. 8, 9. 2, 9. 8. Frankly speaking, this growth estimate is not exciting. In VEECO's recent outlook on MOCVD demand, we can also roughly see the demand for epitaxial chips (Area)The growth rate is within 20. A more important phenomenon is that the mainland's LED chip industry is expected to achieve faster growth. The main reason is that LED chip technology is gradually maturing, and the technological gap between mainland manufacturers and international advanced manufacturers is rapidly narrowing, resulting in large international manufacturers, in particular, the chip manufacturers in Europe and the United States are not willing to increase investment in the epitaxial chip link, and instead look for outsourcing production capacity. According to the information we have learned from the industry, domestic manufacturers have a small gap with international manufacturers in terms of small and medium-sized power chips, while small and medium-sized power is the mainstream technical scheme in indoor lighting. At present, Sanan optoelectronic chip has a level in China, while Huacan optoelectronics and Dehao Runda only follow the small technical gap.