The supply-demand relationship of LED industry chain has changed. The industry is facing new opportunities and challenges1

The signs we see are: (1) In 2016, the upstream price of LED industry chain increased frequently, and some products increased by more than 15; (2) 2016 downstream LED lighting enterprise revenue better usher in a turning point more than enterprise with than growth more than 40. The apparent reason is that the price increase of raw materials is conducted downstream, but in fact the supply-demand relationship of LED industry chain has changed. There are significant signs of improvement in the supply and demand structure of the LED industry. The upstream has entered a price increase cycle, and the downstream performance is outstanding. The signs we see are: (1) In 2016, the upstream price of LED industry chain increased frequently, and some products increased by more than 15; (2) 2016 downstream LED lighting enterprise revenue better usher in a turning point more than enterprise with than growth more than 40. The apparent reason is that the price increase of raw materials is conducted downstream, but in fact the supply-demand relationship of LED industry chain has changed. LED industry chain demand side: LED lighting penetration space is still large, 16 years of small spacing ushered in the outbreak, demand side analysis: LED lighting penetration rate is only 27. 2. The ban on white light from October 1 has prompted LED lighting fixtures to further accelerate the replacement of incandescent lamps, and it is estimated that 60 years of LED bulb production capacity will be consumed. It is estimated that the annual compound growth rate of LED lighting will reach 20 by 2020. 36. Demand side Analysis II: The indoor and outdoor small-pitch LED market continues to be hot, with a demand of more than 140 billion in 16 years, and 17- In 18 years, there will still be a new demand of nearly 40 billion LED per year, while the current capacity of small-pitch LED is about 70 billion LED. The gap between supply and demand is huge. To sum up, the demand has improved significantly. LED industry chain: the expansion of upstream chip capacity has been limited for 16 years, and the concentration of packaging industry has been significantly improved. Analysis of supply side 1: the 13th five-year plan no longer includes LED industry in the cultivation industry. LED chip enterprise subsidies are gradually narrowing. The overall upstream chip capacity has been significantly suppressed in nature. The order quantity of more than 30 MOVCD manufacturers Aixtron and Veeco in 16 years, which occupy 90 of MOVCD supply, can reflect that the upstream capacity expansion will slow down significantly. Supply-side analysis II: After 15 years of deep reshuffle, nearly 4000 LED-related companies have withdrawn from the market, of which the low-end backward packaging production capacity has been fully eliminated and the industry concentration has increased significantly. leading packaging companies with good cost control capabilities will benefit from the increase in scale effect and a significant increase in bargaining power. LED supply and demand pattern is tight, or will continue until 2018. After 15 years of deep reshuffle in the LED industry, the overall supply pattern of the LED industry has been fully adjusted, the entry threshold of the industry has been raised, and the new supply will be greatly reduced. leading companies have expanded their economies of scale and their bargaining power has been significantly improved. In addition, due to the contraction of upstream subsidies LED by the supply-side reform of the Chinese government, disorderly production capacity will be significantly suppressed in the future. At the same time, LED lighting and small-pitch demand end are improving for a long time, so the downstream demand of LED industry chain will continue to be greatly stimulated in the next 2 to 3 years.