Domestic LED chip industry development analysis

In the past two years, overseas chip companies such as the United States, South Korea, and Taiwan have accelerated their entry into the Chinese mainland market, and China’s LED epitaxial, chip companies’ rapid growth, and capacity expansion, and domestic chip companies are facing how to develop core technologies, gain footholds in the market, and rise. The test.

Although the performance of the upstream LED chip manufacturers in the mainland has been growing, it is still based on local government support. In contrast, the previous years were originally "teachers" of LED chip makers in the mainland, LED chip manufacturers in Taiwan were preparing for "winter", and the performance of the two LED chip leaders of Jingyuan Optoelectronics and New Century Optoelectronics was still in a loss situation. .

"We are playing an unfair market competition, the mainland LED chip manufacturers rely on the support of local governments to grab the market at low prices." Epistar chairman Li Bingjie reluctantly stated that the mainland competitors will LED chip prices down LED chip manufacturers have also been forced to lower prices, eventually leading to the company's performance loss, "In fact, the mainland LED chip manufacturers in the LED chip performance is still a loss."

"Since the second half of 2011, the entire LED chip industry has experienced a crisis of overcapacity due to fierce competition, which has led to a drop in chip prices and a drop in gross margins, which has led to the loss of most LED chip companies." The performance boom was mainly due to subsidies and orders from local governments.

Experts in the LED industry frankly stated that mainland China and LED chip manufacturers have been unfairly competitive from the very beginning. High subsidies and orders from mainland Chinese local governments belong to a semi-government and semi-market-oriented behavior. From the perspective of reliability and security, they do not Conducive to the healthy growth of mainland LED chip manufacturers.

However, with the rapid development of LED technology, the pace of LED to the ultimate market of universal lighting is accelerating. Although the general lighting market is still being pushed by the government, the real market started. With the increase of luminous efficacy and lighting requirements for device reliability, high-power chips will be the mainstream in the market, and COB light sources have become a popular choice for LED lighting manufacturers.

MOCVD equipment becomes an obstacle

With the advent of the LED boom, there are now more and more Chinese research institutions and companies entering the field of device development. There may be no fewer than ten companies.

However, it should be noted that a new company does not have sufficient production experience, but often only imitation at the beginning. It does not mention possible intellectual property issues. It only deals with the two key issues of equipment stability and marketization. It is very difficult to solve. Because for a large-scale chip factory, the price of the equipment is only one of the factors that consider the purchase. It is often more important to ensure the stability of the production and the consistency of the product. After the start of the product, the product's yield rate, input of raw materials, consumption of human resources, etc. It is also a key issue to consider. A new product suddenly launched by a new company has not been tested enough and is difficult to be accepted by the market.

In addition, the R&D of equipment takes a long time to accumulate, and it is difficult to succeed in one or two years. Therefore, it is very likely that there will be huge investment of funds and effort in R&D, and it will be too late for the market to advance and the technology will be upgraded. Domestic MOCVD equipment is still in the technical tracking stage, and the industrialization level of equipment is incompatible with production needs. Independent innovation needs to be strengthened, and a word saying in the stock market is used. It is that “the stock market is risky and it needs to be cautious when entering the market”. What we have to say here is that “domestic significance is large and investment needs to be cautious”.

It is undeniable that the LEDs on the Bird’s Nest and Water Cube in the Olympic Games venues that have attracted worldwide attention in 2008 are heavily used in imported chips. By 2009, the Ministry of Science and Technology will launch demonstration projects for "Ten Cities and Ten Thousand Peoples" pilot projects and 2010 national development. The semi-conductor lighting product application demonstration projects jointly commissioned by the Reform Commission, the Ministry of Housing and Urban-Rural Development, and the Ministry of Transportation and Communications, under the premise of guaranteeing the quality of demonstration projects, have imposed high requirements on performance and reliability, and many successful bidders have also Conservatively selected imported chips. "The domestic high-power chip companies benefit less."

One industry insider is worried that if China continues to lack high-quality high-power LED chips in the future, even if the government invests ten times in the demonstration project, it will only make more profit for foreign chip makers in China. , China's domestic packaging and application companies can only get a meager "hard work", China's LED industry will surely enter the sad DVD industry's footsteps.

Due to the fact that the core equipment and some raw materials have been dependent on imports, lack of core patents for epitaxy chips, insufficient testing methods, and inadequate equipment support, there has been a wide gap between China's semiconductor lighting industry and the international advanced level. As a core device for the production of LED chips, MOCVD (Metal Organic Chemical Vapor Deposition) equipment is only able to get rid of the "import dependency syndrome" and achieve domestic production.

In recent years, with the characteristics of high-efficiency, energy saving and environmental protection, LED industry has achieved rapid development in China. According to the “Twelfth Five-Year Plan” for the development of semiconductor lighting technology released by the Ministry of Science and Technology, by 2015, the scale of the LED industry is expected to reach 500 billion yuan.

As a key equipment for the production of LED chips, most of China's MOCVD equipment has relied on imports in recent years, and the market has been monopolized by European and American companies.

Data show that MOCVD equipment procurement has seen "crazy" growth in the past two years. By 2010, the total installed capacity of MOCVD in mainland China was only around 150 units. By the end of 2010, it had increased to 350 units, and by the end of 2011 it had reached nearly 700 units. According to statistics, as of the end of November 2012, the number of domestic MOCVD equipment has reached 909 units.

Senior research analyst SEMI China senior analyst and LED project manager Qi Faxin told reporters that in the past two years, the growth rate of MOCVD equipment in China has ranked first in the world, but also become the world's two largest MOCVD equipment companies AIXTRON (Aisiqiang) and VEECO ( Veeco's largest source of income.

In the eyes of the industry, mass production MOCVD relies on imports, which seriously restricts the development of the domestic LED industry's autonomy. According to reports, the price of an imported MOCVD device is currently around 15 million yuan.

In order to break the control of the domestic LED industry, the “Twelfth Five-Year Plan for the Development of Semiconductor Lighting Technology” issued by the Ministry of Science and Technology clearly puts forward that during the “Twelfth Five-Year Plan” period, it will “realize the localization of large-scale MOCVD equipment and key supporting materials”.

Following this development strategy, starting from 2011, many domestic LED equipment companies, including Acer Epson and Ideal Energy, began to attempt to introduce domestic MOCVD equipment. As of the end of 2012, nearly 20 domestic companies and research teams have announced their involvement in MOCVD equipment technology research and development.

History has reached a turning point. The Chinese LED industry needs the emergence of its own MOCVD company to enhance the technology and innovation capabilities of the entire LED industry. Although domestic equipment must achieve mass production, there is still a long way to go. The increase in the level of domestic MOCVD equipment depends on the domestic LED chip manufacturers’ desire for innovation and the investment ability of funds, and on the trust of LED chip manufacturers for domestic equipment.

Domestic LED chip is expected to break through

It is understood that at present, the Taiwan Ministry of Economic Affairs' Investment Trial Meeting passed the Sanan Optoelectronics Co., Ltd. stock-sharing case on August 29. However, the Industry Bureau proposed the "four non-principles" and asked Sanan to promise that "there must not be a request for transfer of patents, no excavation of talents, no intervention." Management and not technology transfer," Sanan agreed to perform, so the entire case was determined to NT $ 2.352 billion, to invest 19.9% ​​of equity stake, a record of the first land-invested share of my LED investment.

The Investment Commission revealed that it is not ruled out that the key technology industries such as LEDs, semiconductors and panels between the two sides of the Taiwan Strait require the inclusion of the “four non-principles”.

From last year's announcement in November last year, NT$ 19.6 per share, the total amount of not more than 2.352 billion yuan, issued 120 million shares of private equity, the introduction of Xiamen Sanan photoelectric funds. With a capital increase of approximately RMB 6.016 billion after the capital increase, Sanan will hold 19.9% ​​of the equity, becoming the single largest corporate shareholder, and the shareholding will be higher than 15% of the current largest corporate shareholder, Japan Mitsui.

After the announcement of this investment case, it shocked the LED industry sector and caused a partial rebound in the domestic industry. Takumi and Sanan submitted applications to the Ministry of Economy in February this year until the end of August.

The Bureau of Industry believes that Taiwan’s LED industry has the advantages of complete supply chain, technology research and development, patent layout, and talent supply, but it lacks funds and markets, and the mainland has the advantage of a huge domestic market and the largest OEM base of lighting fixtures in the world. The security and win-win situation has an reciprocal and win-win result. Sanan can leverage on its patents to expand its international market. The company is relying on Sanan to enter the mainland LED packaging supply chain in order to obtain onshore lighting bids.

However, the Ministry of Economic Affairs considers many key technologies and patents in the LED industry. In addition to the relatively small scale of the Taiwan factory, the Industrial Bureau has set four principles and requires the Sanan commitment to be achieved. 1. No transfer of patents may be required. Secondly, no talents shall be excavated. 3. No access shall be given to operating teams and management rights. 4. Technology transfer shall not be required.

For Taiwan's epi-factory, the introduction of mainland San'an funds has become the first case of the horizontal integration of Taiwan's and mainland's science and technology industries. Since it was announced in November last year, the case card on Taiwan's "Ministry of Economy" has officially passed the customs clearance on the 29th. The chairman of the circle, Jane Jianren, said that the cooperation between the two parties can finally be formally launched. The immediate international order can be confirmed. The success of the round can finally stand on the international stage. The next step will be better and better.

At present, the MOCVD machine platform has been expanded to 107 units on both sides of the Taiwan Strait, and Sanan has also completed expansion. Currently there are 170 MOCVD machines. After the cooperation between the two parties, the total number of MOCVD machines reached 277, and the number of MOCVD machines reached 20,000. The production capacity on the single unit quickly brought the distance between MOCVD, which is the leader of the world's largest professional epi-factory epitaxial plant, and 300 units.

Jian Fengren pointed out that due to the lack of cooperation between the two parties, this has not been started in the past six months. Therefore, the operating performance in the third quarter of this year did not show the cooperation benefits between both parties. Now that the customs clearance has passed, both sides can start joint procurement and capacity division. The cooperative relationship between orders and orders will help expand the sea.

On the other hand, the plan to expand LED exports to the mainland industry chain along with the mainland industry chain, in addition to the horizontal integration of Diane Love, has also begun to integrate vertical integration investment downstream module factory. After the crossing of Zhaoan, Yuen-Yuan is still waiting for the investment committee to establish a LED backlight source and module, lighting source and module factory through the joint venture between Tung Yuen and Continental Color TV Group TCL Group and LED Packaging Factory Shenzhen Ruifeng Optoelectronics. The investment case was evaluated in full, once the case was approved by the investment committee, the benefits of the newly established joint venture plant for the success of the round can be seen in the second half of the year.

In the first half of this year, the company faced the pressure of deficit orders. In the first half of the year, the net loss after tax was 466 million (NT, the same below), and the loss was still 0.98 yuan per share. The company has already made losses for six consecutive quarters. Jianfeng Ren pointed out that the third quarter results benefited from stable TV backlight orders, small and medium size backlights, and lighting market growth. Capacity utilization remained at 8 to 90% in the third quarter, but LED prices continued to decline. Work hard. Now the cooperation with Sanan can be formally launched, which will help the company's business growth.

Before the device's luminous efficiency reaches the theoretical limit, the LED industry will be a field driven by technological innovation. Differentiation and specialization will determine the company's development and future. However, "On the technical level, the current domestic chip industry has indeed caught up with the level of foreign research and development, but a large number of enterprises can be mass production, technology is not the only key to determine the success or failure of enterprises, companies must win in the fierce competition, the most It is important to look at its competitiveness in terms of mass production yield, quality, and cost control.The current problem faced by LED chip companies in China is how to industrialize, scale, and maximize their benefits.