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Cross Strait LED chip industry consolidation tide accelerated

From: Data:10/08/2016

LED integration tide is accelerating the process of photoelectric acquisition of Dongguan Lei Chau and Ma'anshan harmony photoelectric acquisition of Jiangxi Rui technology.

since August last year, the two sides have occurred since at least 5 cases of LED wafer industry integration.

data source: LEDinside finishing

2012 in August, the crystal power of the acquisition of the remaining 49% equity interest in the acquisition of a wide range of gallium, become its wholly-owned holding company.

11, Sanan optoelectronics released the relating to foreign investment, a wholly owned subsidiary of the notice ", intends to use self financing is not more than 2.352 billion new Taiwan dollars (about 50568 million yuan in the RMB subscribe for Taiwan Stock Exchange listed company canyuan photoelectric issued in the way of private placement does not exceed 1.2 million shares of common stock. After the completion of the transaction, an optoelectronic canyuan photoelectric technology will hold approximately 19.9% of the shares, becoming the first major shareholder canyuan photoelectric.

2013 in January, the country star power by the concerning capital Xu Rui optoelectronics Co., Ltd. motion ", will be to the subsidiary company Xu Rui optoelectronics capital 50 million yuan, after the completion of the capital will hold Xu Rui optoelectronics 60.55% stake in, become the country star electronically controlled subsidiaries.

4, Xiamen dry according with the Golden Eagle Technology signed a "relating to the Dongguan ZHOULEI Electronic Co., Ltd. equity transfer agreement of intent", the company intends to through to its own funds transferee Golden Eagle Technology Holding Dongguan Lei Chau 100% equity holding Dongguan Lei Chau.

in the same month, the successful acquisition of Jiangxi Rui Ma'anshan harmony technology and has completed the transfer procedures.

two cases a month, the evidence shows that the integration of the tide is accelerating the process.

the warmer climate, the integration of upstream is inevitable result of

from the beginning of 2010, the frenzied investment in LED chip industry in China directly lead to severe overcapacity in the wafer, falling prices, most enterprises have been struggling. LED travel wafer industry overcapacity problem still can not be eased in the short term, so the industry integration is an inevitable result.

1. investment overheating, excess capacity

according to LEDinside statistics, as of the end of 2012 the number of Chinese MOCVD equipment has more than 900 units, the number of domestic new MOCVD from 2009-2012 to more than 800 units.

1 2009-2012 China over the years MOCVD added quantity

data sources: LEDinside

2009, Yangzhou municipal government announced the first MOCVD cash subsidies, for one-time purchase of LED wafer production new MOCVD equipment by more than 5 sets (including 5) the new or expanded investment projects give subsidies, then Jiangmen, Wuhu, Hangzhou, Wuhan and other local governments have announced a similar policy. Government MOCVD subsidy policy directly led to the domestic new LED extension of the crystal film projects have sprung up. According to statistics, a total of 2009-2012 years, the establishment of a new LED epitaxial wafer project a total of 65, but due to poor market environment, more than 3 into the project has now quit or shelved.

follow the trend of investment led to a serious surplus of wafer production capacity, in 2012 China's MOCVD capacity utilization is less than 5. A drop in the

2. enterprise gross margin

2 2010-2012 mainly enterprises led chip business gross margin situation

data source: company earnings, ledinside finishing

note: Sanan optoelectronics 2012 gross margin to the LED business gross margin, the LED business mainly includes LED chips and LED application products.

overcapacity led to increasingly fierce market competition, in addition some of the chip companies rely on government subsidies to take low-cost market strategy, a direct result of the chip market a red sea. Can be seen from Figure 2, LED 2010-2012 chip business gross profit margin showed a rapid downward trend. LEDinside survey found that in 2012 the domestic LED display chip prices fell the most serious, some low-end product prices fell by 5. Hangzhou Silan azure photoelectric display chip in 2012 the main business gross profit margin of only 5.7%.

listing Corporation, the non-listed company is more serious. According to the survey, in 2012 most of the domestic chip companies on the edge of loss, some did not have the funds to support the enterprise has fallen, China's LED chip industry has changed from the early technology competition to capital competition.

3. technology competition turns into capital competition

LED industry market growth is not expected, leading to the emergence of a variety of bad market phenomenon. Such as the triangle debt problem has spread upstream chip industry, enterprises generally extend the time of payment. The other part of the enterprise because of financial support and government subsidies, do not hesitate to take cheap Paohuo market strategy. Boil, has become the norm in the LED chip business, but the need to make a lot of money to support. Industry competition has been transferred from technical competition to capital competition. And some do not go down the business, and now the most looking forward to is that someone to pick up the disk.

chip industry, large-scale industrial integration time is approaching and on the other hand, industry warmer signal also contributed to the relatively abundant capital as part of the manufacturers have the courage to gamble, by equity acquisition of low cost horizontal merger to obtain future competition scale advantages.

some people want to get out of trouble, some people dare to offer, and the probability of occurrence of new cases greatly enhance. LEDinside is expected that the next year China's LED chip industry consolidation will accelerate a large range of.