[Source: LED Engineering's "LED Research Review" magazine May issue of reporter / Long Hui Zong 2012] If you ask why the LED chip manufacturers declining profits, the answer is mostly "chip prices fell too fast." The reason for this is that in recent years, China's mainland chip manufacturers represented by Sanan Optoelectronics (SH.600703) and Dehao Runda (SZ.002005) have entered the market at a low price, making Jingyuan Optoelectronics (hereinafter referred to as "crystal" Taiwan" chip companies are struggling to cope.
According to statistics from the High-Tech LED Industry Research Institute (GLII), in 2012, among the seven chip-listed companies in Taiwan, except for Guanglei and the high-power stage lighting market, the other manufacturers lost money.
As a leading chip company in Taiwan, Jingdian has not maintained a good overall market in the past few years. The company still maintains profitability, but it was dragged down by the serious losses of the two holding companies of Taigu and Guanglu last year and the impact of low-cost chips in the mainland. Eventually "falling off."
According to the financial report released by Jingdian, its sales fell from NT$19.766 billion in 2009 to NT$17.532 billion in 2012. Gross profit also fell from NT$7.081 billion in 2009 to 2.715 billion in 2012. In NT, the net profit was a loss of NT$1.203 billion in 2012.
Mainland manufacturers low price impact
According to the statistics of the High-tech LED Industry Research Institute (GLII), the price of LED chips in mainland China continued to decline sharply in 2011, the average price dropped by 32% year-on-year, and the decline of some products was as high as 50%.
The reporter learned from some packaging factories that the price of crystal chips has dropped by about 20% last year, and the price of Sanan Optoelectronics has dropped by more than 25%, especially since the end of 2011. At the same time, the emergence of the price butcher Dehao Runda also caused the price war in the chip market to suddenly escalate.
In addition to the oversupply of its own production capacity, the root cause of the price war is related to the sharp price cuts of downstream LED displays, backlights and lighting products.
LED display is the most fierce battlefield of last year's "price war". According to statistics from GLII, the price of LED display continued to decline in 2012, down 15%-20% last year. The gross profit margin of LED display has dropped to 10%-15%.
“The price of LED display devices dropped by 50% last year. We must rely on greater capacity to increase sales.†Wu Xianghui, general manager of Anpuguang, told reporters that we use Silan Mingxin chips for mainland customers, foreign customers. Most of them use crystal chips. "The spread between the two is around 5%-10%."
The LED lighting market grew rapidly in the past year. From the perspective of LED indoor lighting in mainland China, the statistics of the High-tech LED Industry Research Institute (GLII) show that the market size has reached 33.5 billion yuan last year, an increase of 80%.
Among them, the price of LED bulbs in mainland China continued to decline in the first half of 2012, which was 8%-10% lower than the same period last year. For example, the price of 3W LED bulbs is 10 yuan/only, some have reached 8 yuan/only; the price of 5W LED bulbs is 21 yuan/only, and some have reached 18 yuan/only.
According to the information collected by reporters from high-tech LED stations, the price of LED bulbs in the second half of 2012 decreased by at least 20% on the basis of the first half of the year.
Even if the price drops so fast, the market penetration of LED lighting in 2012 is only 7%, the biggest factor is the price.
Last year, many companies vigorously promoted flat-priced lamps at any cost. The average market price has even approached 3 yuan/W, and the downstream price has a very obvious effect on the upstream. Especially the large-scale packaging plants in mainland China have begun to seize market share. Switch to a cheaper mainland-made chip. After all, compared with the Taiwan region, as well as the European, American and Japanese chips, there is still a 10% spread in mainland China chips.
High-end market comfort
In the face of today's market conditions, Jingdian has to solve two problems, one is to increase sales, and the other is to reduce the losses of Guangjiao and Taigu holding companies as soon as possible.
The reporter visited a number of mainland LED packaging listed companies to understand that at present, we generally use the products of Jingdian for export or special customers with high quality requirements.
Because the customers in overseas markets are still most concerned about chips, phosphors and structures, the licensing of crystal power and major international manufacturers makes the lighting products based on crystal chips more acceptable to foreign customers.
Simply put, the products of Jingdian have become more and more advantageous in the field of higher technical requirements. Because the technical difficulty is smaller, the smaller the gap between the domestic chip and the crystal power, the price disadvantage will be more obvious.
On April 23, the third quarter of the US CRE (January to March 2013) reported that its revenue increased 23% (1% increase) to 348.9 million US dollars, and the gross profit margin was also Synchronous recovery, operating conditions are higher than market expectations.
"This year, the market is obviously oversupply, especially in the low-end market. However, the high-end market is still in short supply, and the unit price of the chip will be better. This is also evident from the financial report of Cree. Crystal will further develop its high-end products this year, hope Taking this as an opportunity to increase revenue.†Wang Junbo, deputy general manager of Jingyuan Baochen Optoelectronics (Shenzhen) Co., Ltd. said that in addition to the above measures, Jingdian will work harder to establish deeper cooperation with customers this year.
"Now is a flat world. It is not realistic to seek long-term differentiation, because differentiation will soon disappear due to plagiarism." Wang Junbo said that the long-term development of chip companies requires the promotion of downstream LED lighting. What can be done now is how to improve the cost performance of their products and help customers improve the cost performance of their products.
The reporter learned that at the beginning of this year, Guangbao and Jingdian's joint-venture Jingzhou plant will add 8 MOCVD machines to expand LED lighting, and the pan-crystal scale effect formed by the wide-gauge machine is expected to further reduce the cost of the chip.
As for the performance of Taigu and Guangjia, Wang Junbo said that Jingdian is only a shareholder in Taigu and has no holdings. Guangguang has already passed some of the technology integration with Jingdian, and some of the chip models with no price/performance ratio have been discontinued, and the losses are also shrinking month by month.
In fact, from the financial reports of mainland listed chip companies such as Sanan Optoelectronics and Dehao Runda in recent years, it can be seen that apart from the huge government subsidies, their main business is almost loss or low profit.
“There is no government subsidy for Jingdian, and it is also a Taiwanese enterprise. It is not easy to stand firm in the mainland market.†An industry source said that mainland local governments have reduced subsidies for upstream projects last year, and hope that mainland chip companies can participate freely. market competition.
On the other hand, in recent years, the quality of mainland chip factories has also improved rapidly. Many chip factories have expanded their production capacity, reduced costs and improved quality by absorbing talents, shares, and acquisitions. However, judging from the current market situation, the confrontation between the mainland chip factory and the chip factory in Taiwan cannot be eliminated in the short term. Who can win in this war, perhaps the answer in the past two years.
According to statistics from the High-Tech LED Industry Research Institute (GLII), in 2012, among the seven chip-listed companies in Taiwan, except for Guanglei and the high-power stage lighting market, the other manufacturers lost money.
As a leading chip company in Taiwan, Jingdian has not maintained a good overall market in the past few years. The company still maintains profitability, but it was dragged down by the serious losses of the two holding companies of Taigu and Guanglu last year and the impact of low-cost chips in the mainland. Eventually "falling off."
According to the financial report released by Jingdian, its sales fell from NT$19.766 billion in 2009 to NT$17.532 billion in 2012. Gross profit also fell from NT$7.081 billion in 2009 to 2.715 billion in 2012. In NT, the net profit was a loss of NT$1.203 billion in 2012.
Mainland manufacturers low price impact
According to the statistics of the High-tech LED Industry Research Institute (GLII), the price of LED chips in mainland China continued to decline sharply in 2011, the average price dropped by 32% year-on-year, and the decline of some products was as high as 50%.
The reporter learned from some packaging factories that the price of crystal chips has dropped by about 20% last year, and the price of Sanan Optoelectronics has dropped by more than 25%, especially since the end of 2011. At the same time, the emergence of the price butcher Dehao Runda also caused the price war in the chip market to suddenly escalate.
In addition to the oversupply of its own production capacity, the root cause of the price war is related to the sharp price cuts of downstream LED displays, backlights and lighting products.
LED display is the most fierce battlefield of last year's "price war". According to statistics from GLII, the price of LED display continued to decline in 2012, down 15%-20% last year. The gross profit margin of LED display has dropped to 10%-15%.
“The price of LED display devices dropped by 50% last year. We must rely on greater capacity to increase sales.†Wu Xianghui, general manager of Anpuguang, told reporters that we use Silan Mingxin chips for mainland customers, foreign customers. Most of them use crystal chips. "The spread between the two is around 5%-10%."
The LED lighting market grew rapidly in the past year. From the perspective of LED indoor lighting in mainland China, the statistics of the High-tech LED Industry Research Institute (GLII) show that the market size has reached 33.5 billion yuan last year, an increase of 80%.
Among them, the price of LED bulbs in mainland China continued to decline in the first half of 2012, which was 8%-10% lower than the same period last year. For example, the price of 3W LED bulbs is 10 yuan/only, some have reached 8 yuan/only; the price of 5W LED bulbs is 21 yuan/only, and some have reached 18 yuan/only.
According to the information collected by reporters from high-tech LED stations, the price of LED bulbs in the second half of 2012 decreased by at least 20% on the basis of the first half of the year.
Even if the price drops so fast, the market penetration of LED lighting in 2012 is only 7%, the biggest factor is the price.
Last year, many companies vigorously promoted flat-priced lamps at any cost. The average market price has even approached 3 yuan/W, and the downstream price has a very obvious effect on the upstream. Especially the large-scale packaging plants in mainland China have begun to seize market share. Switch to a cheaper mainland-made chip. After all, compared with the Taiwan region, as well as the European, American and Japanese chips, there is still a 10% spread in mainland China chips.
High-end market comfort
In the face of today's market conditions, Jingdian has to solve two problems, one is to increase sales, and the other is to reduce the losses of Guangjiao and Taigu holding companies as soon as possible.
The reporter visited a number of mainland LED packaging listed companies to understand that at present, we generally use the products of Jingdian for export or special customers with high quality requirements.
Because the customers in overseas markets are still most concerned about chips, phosphors and structures, the licensing of crystal power and major international manufacturers makes the lighting products based on crystal chips more acceptable to foreign customers.
Simply put, the products of Jingdian have become more and more advantageous in the field of higher technical requirements. Because the technical difficulty is smaller, the smaller the gap between the domestic chip and the crystal power, the price disadvantage will be more obvious.
On April 23, the third quarter of the US CRE (January to March 2013) reported that its revenue increased 23% (1% increase) to 348.9 million US dollars, and the gross profit margin was also Synchronous recovery, operating conditions are higher than market expectations.
"This year, the market is obviously oversupply, especially in the low-end market. However, the high-end market is still in short supply, and the unit price of the chip will be better. This is also evident from the financial report of Cree. Crystal will further develop its high-end products this year, hope Taking this as an opportunity to increase revenue.†Wang Junbo, deputy general manager of Jingyuan Baochen Optoelectronics (Shenzhen) Co., Ltd. said that in addition to the above measures, Jingdian will work harder to establish deeper cooperation with customers this year.
"Now is a flat world. It is not realistic to seek long-term differentiation, because differentiation will soon disappear due to plagiarism." Wang Junbo said that the long-term development of chip companies requires the promotion of downstream LED lighting. What can be done now is how to improve the cost performance of their products and help customers improve the cost performance of their products.
The reporter learned that at the beginning of this year, Guangbao and Jingdian's joint-venture Jingzhou plant will add 8 MOCVD machines to expand LED lighting, and the pan-crystal scale effect formed by the wide-gauge machine is expected to further reduce the cost of the chip.
As for the performance of Taigu and Guangjia, Wang Junbo said that Jingdian is only a shareholder in Taigu and has no holdings. Guangguang has already passed some of the technology integration with Jingdian, and some of the chip models with no price/performance ratio have been discontinued, and the losses are also shrinking month by month.
In fact, from the financial reports of mainland listed chip companies such as Sanan Optoelectronics and Dehao Runda in recent years, it can be seen that apart from the huge government subsidies, their main business is almost loss or low profit.
“There is no government subsidy for Jingdian, and it is also a Taiwanese enterprise. It is not easy to stand firm in the mainland market.†An industry source said that mainland local governments have reduced subsidies for upstream projects last year, and hope that mainland chip companies can participate freely. market competition.
On the other hand, in recent years, the quality of mainland chip factories has also improved rapidly. Many chip factories have expanded their production capacity, reduced costs and improved quality by absorbing talents, shares, and acquisitions. However, judging from the current market situation, the confrontation between the mainland chip factory and the chip factory in Taiwan cannot be eliminated in the short term. Who can win in this war, perhaps the answer in the past two years.
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