LED localization trend shows good chip and backlight1

The Taiwan media and the Evening News reported on the 21st that the mainland's Ministry of Commerce had investigated the monopoly in the morning, and it was proposed to raise the tariff of the LED factory from the current 4 to 10. Affected by this negative impact, the Taiwan-based LED factory experienced a general setback on the 21st, while the mainland LED sector rose sharply. Tariff rumors still need to be further verified, and there is no official accurate information. Earlier, Yu Zhengsheng, chairman of the National Committee of the Chinese People's Political Consultative Conference, met with the mainland trade and economic delegation of the Taiwan Federation of Industry in Beijing. He said that Taiwanese businessmen have super-national treatment in many parts of the mainland, and this part should be gradually canceled. Then to the recent series of anti-monopoly incidents and the strong support attitude of the semiconductor industry at the national level, the LED industry may also become the official support direction. If the tariff is really raised in the future, this move will further restrict the import of LED products from abroad and Taiwan, causing a major impact on Taiwan enterprises and protecting domestic LED enterprises to a greater extent. Tariff rumors are only triggers, and the general trend of localization has long been determined. Whether the future tariff rumors are confirmed or falsified, it will not affect the big logic of investment in the LED industry. The transfer of LED industry chain to the mainland has long been the general trend and irreversible. First of all, the trend of LED mainland enterprises' overall competitiveness surpassing Taiwan enterprises has been formed, which is more certain and longer-term than simple policy support. From the perspective of capital, technology, talents and market, Taiwan enterprises are gradually losing their advantages. In the future, mainland LED enterprises will replace Taiwanese enterprises. LED also belongs to electronic manufacturing industry, which attaches importance to technological innovation, cost control, scale effect and rapid response. There are several favorable factors for mainland enterprises to replace their counterparts in Taiwan: 1. Labor cost: the average salary of domestic technicians and managers of the middle and base is much lower than that of Taiwan cadres. Sufficient college graduates enable domestic LED enterprises to continue to enjoy the engineer bonus in the future. 2. Industrial clusters and broad domestic demand market: LED industrial clusters in mainland China have been formed, with broad lighting market demand, concentrated most of the packaging capacity, and enterprises have the advantage of fast response service. 3. Valuation difference: in the past few years, the high PE of the electronics industry in the domestic secondary market has provided sufficient and low-cost financial support for the capacity expansion of domestic electronics enterprises, and has also provided conditions for the merger and integration of the industry. 4. Differences in management: the management of domestic LED enterprises are generally young, full of enterprising spirit and more active in struggle. The trend of localization substitution is good for chips and backlights. In the field of LED chips, the market share of Taiwan enterprises such as Jingdian, Jingyuan and New Century is still relatively high, occupying the main market share. With the improvement of product quality and cost performance of mainland enterprises such as Sanan and Huacan, in the future, Taiwanese companies will replace the general trend. In the field of large-size backlight, Taiwanese companies also occupy a major market share, but the competitiveness of mainland companies is increasing. The LED economy is high, and the long-term market of the LED sector is optimistic. From the perspective of scope, the LED industry will continue to advance with high prosperity in 2014. Whether it is international first-line lighting giants such as Philips and Osram, or LED industry chain enterprises in South Korea and Taiwan, they are optimistic about the outbreak of the LED lighting market and continue to increase investment. The prosperity of the LED market mainly depends on three aspects, the first is the stabilization of the backlight market, the second is the large-scale start-up of public and commercial lighting, followed by the rapid increase in the penetration rate of home lighting. these three conditions seem to be in place at present. This round of LED industry boom will run through the whole year, and even continue to the two or three years when the penetration rate of LED home lighting will continue to increase in the future. LED will run through the whole year in 2014. Under the background of lighting volume and rapid demand growth, many enterprises will usher in a double turning point of revenue and profit margin. Judging from the investigation of the industrial chain, many LED companies have the demand for mergers and acquisitions and refinancing this year. As the profit base of second-and third-tier LED enterprises is generally not high, the corresponding performance elasticity is very large.