LED packaging companies have expanded their production industry is expected to bottom out1

It is observed that the prosperity of the LED industry rebounded year-on-year in 2016. The continuous decline in prices LED to a further increase in LED penetration. In addition, due to the promotion of emerging markets such as India and Southeast Asia, LED market demand has increased significantly year-on-year. In recent years, many large factories have signed strategic cooperation agreements one after another, and the signs of grouping are becoming more and more obvious. Therefore, the market share of large factories will be unobservable. The prosperity of LED industry will pick up year on year in 2016. the continuous decline in prices has LED to a further increase in LED penetration. In addition, due to the promotion of emerging markets such as India and Southeast Asia, the demand for LED markets has increased significantly year-on-year. In recent years, many large factories have signed strategic cooperation agreements, and the signs of the group are becoming more and more obvious. Therefore, the market share of large factories will continue to increase, which is also the main driving force for the expansion of large factories. The market share has increased and there are obvious signs of expansion of large factories. Observing the announcement of manufacturers recently, Guoxing Optoelectronics announced on October 10 that it plans to invest no more than 0. 4 billion yuan to expand the LED packaging project. Since November 2015, Guoxing Optoelectronics has announced three LED package expansion plans, with the first two investments of RMB 0. 4 billion and RMB 2 respectively. For the project of 0. 4 billion yuan, the production capacity has been gradually released. In the past year, new production capacity has been continuously released, including manufacturers such as Guoxing Optoelectronics, tiandian optoelectronics and mulinsen. In the next year, these manufacturers will continue to expand their production. however, unlike the collective expansion of production in previous years, the manufacturers expanding production at this stage are mainly large enterprises, and the expansion of small and medium-sized enterprises is less. The market competition is still fierce, and the profitability of manufacturers is relatively low. Although large manufacturers have expanded their production, the LED market competition is still fierce, and the profitability of packaging manufacturers is still low. According to LEDinside statistics, the average gross profit margin of 2Q16 major Chinese manufacturers is 24. 5, down 1 percentage point year-on-year. The gross profit margin in some areas is ridiculously low. For example, in the lighting LED field, the gross profit margin of Ruifeng Optoelectronics 1H16 is only 10. 5%. 9, jufei Optoelectronics 1H16 Gross profit margin is only 9. 4. However, entering 3Q16, due to the rise in chip prices, some packaging manufacturers have also adjusted the price, and the gross profit margin is expected to improve. The price slowdown is slowing down, and the profitability of manufacturers is expected to improve. In May 2016, Jingdian took the lead in raising prices for some chips, but Chinese manufacturers did not follow at that time, but prices have stabilized. On September, Chinese chip manufacturers including Sanan, Tongfang and Zhongke have increased the price of small-sized chips. The strong market demand for small-pitch display screens has led to a sharp rise in the demand for small-size display chips. In addition, in the lighting field, the demand for small-size lighting chips has also increased due to the pursuit of high luminous efficiency by downstream manufacturers. Due to the sharp decline in the price of small-sized chips in 2015, many chip manufacturers have gradually reduced the production capacity of small-sized chips. As a result, the supply of small-sized chips exceeds the demand in a short period of time, and the price rises accordingly. Due to the rise in chip prices, device prices have also begun to rise, especially in the display field, such as mulinsen, Apu light and Cinda optoelectronics, and announced price increases. Compared with 2015, the price of LED packaging tends to be stable in 2016. Since 2014, the fierce market competition has led to the continuous decline in the profitability of manufacturers. Many small and medium-sized packaging enterprises have been forced to withdraw. The emergence of mergers and acquisitions has also led to the increasing scale of large manufacturers. In the past, Jason was the only company in the world. However, the scale of Guoxing optoelectronics and Hongli Optoelectronics is gradually increasing. This year, it is expected to break through the revenue scale of RMB 2 billion, and the size of other second-camp manufacturers is gradually increasing. This round of expansion of production is mainly led by large enterprises, including mulinsen, Guoxing, Hongli, Cinda and other large manufacturers. The scale of production capacity continues to expand, and the industry reshuffle will accelerate. The author believes that the LED industry will gradually enter the stage of bottoming out and rebounding. The market share of large factories will continue to expand, the bargaining power will be improved, and the profitability will gradually improve.