The tightening of government subsidies in the LED industry is a major trend

According to relevant reports, the mainland government will require local governments to stop providing subsidies or tax incentives to LED-related wafer and chip manufacturers. I do not know whether due to this news, LED upstream chip manufacturers Sanan Optoelectronics, Huacan Optoelectronics shares fell by 0. 7/and 1. 4. So far, Sanan Optoelectronics has not received official documents, but the future subsidy for the LED industry is a major trend. Wang Qingru, the secretary of Sanan Optoelectronics, said. Wu Yulin, president of Foshan Lighting Industry Association, also believes that the current import volume of domestic chip production equipment is too large. In fact, due to the support of local governments, the industry is expanding too fast. The data shows that the past 6- In the past seven years, China has invested 10 billion yuan in imported MOCVD equipment for LED chip production, of which Yuan has been subsidized by local governments. It has no effect on Dehao Runda. Deng Fei, the secretary of Dehao Runda, told the reporter that according to his introduction, the company completed the layout and investment of production capacity before 2012, and then transferred the funds to the downstream channels and brand owners of NVC Lighting, upstream government subsidies are mainly for chip production equipment MOCVD. Dehao Runda said in the 2014 annual report that on February 11 this year, the company's second extraordinary shareholders' meeting passed a proposal to terminate the use of raised funds to implement LED epitaxial chip projects and suspend the purchase of MOCVD equipment. Sanan Optoelectronics and Huacan Optoelectronics continue to increase production capacity. On January this year, Huacan Optoelectronics announced that it would take 3. 0. 5 billion yuan to start the production of 15. 4 billion chips; In April, Sanan Optoelectronics set up a subsidiary in Xiamen with a total investment of 10 billion yuan and 200 MOCVD units. From the financial report, government subsidies account for a large proportion of these manufacturers' revenues. Sanan Optoelectronics 2013 annual report shows that the company received a total of about 4. 5. 8 billion yuan of government subsidies, accounting for of the year's net profit. 21; Huacan Optoelectronics received subsidies 1. A net loss of 3. 5 billion yuan under 8. 62 million yuan; Dehao Runda's government subsidies included in the current profit and loss in the first three quarters of this year ( Closely related to the business of the enterprise, except for government subsidies enjoyed in accordance with the national unified standard quota or quantitative), Reached 1. RMB 0. 1 billion. Wang Qing believes that the cancellation of financial subsidies has a greater impact on the newcomers in the LED industry, and Sanan Optoelectronics has achieved certain industry status. Even if there is an impact, it is positive. Dehao Runda also believes that after the withdrawal of the subsidy policy, the industry will resume its normal state next year, and the chip price will be raised, which is beneficial to business operations.