Market expects high LED bubble burst

Recently, the reporter went to the Dongcun Industrial Zone of West Link in Nanhai, Foshan, where he used the guidance of passersby to find Shuai Liang Hardware Products Factory. However, the factory gate has been locked and the original “Foshan Shuailiang Hardware Product Factory” brand has disappeared. Through the windows, you can see empty workshops, documents and cartons scattered all over the place. Only two or three LED downlight molds scattered on the ground and windowsill, it seems to prove that this was a LED lighting production plant.

“I heard that the orders for the LED lights were cancelled. I did not expect that the factory owner would run away so quickly that the supplier who had owed money had to remove the factory equipment to reduce losses,” said one employee.

Exorbitant market expectations eventually led to the gradual collapse of domestic LED bubble in the second half of 2011. “The two major markets of LED backlighting and LED lighting are the main incentives for the domestic LED investment boom.” Gong Weibin, chairman of Ruifeng Optoelectronics, stated that the industry originally expected that the explosive growth of LED TVs would increase the LED market size by five times. The actual situation is that although LED TV penetration rate has exceeded 40% this year, but with the maturity and transformation of technology, the absolute number of LED backlight chips has not doubled.

Reporter learned from a number of LED companies, originally expected this year's domestic LED lighting market penetration will rise to 6%, but the fact is less than 1%. The reality of LED terminal application market has become an irreconcilable contradiction with the previous crazy LED investment.

Industry Reshuffle In September, GCL Electronics, which had claimed to invest US$2.5 billion to purchase 500 MOCVD equipment (LED epitaxial wafers production equipment), suddenly stopped construction of the LED epitaxial wafer project in Zhangjiagang, opening the prelude to the market elimination of excess LED capacity. .

“Conservatively, the number of LED companies that have collapsed this year has already exceeded 10%. Among them, there are more than 100 packaging companies and 300 lighting companies, most of which are small enterprises.” Zhang Xiaofei, president of the China Industrial Research Institute, said that if the The number of domestic MOCVD projects planned by LED companies is about 10 times higher than the current market demand. Now that the domestic production capacity of MOCVD is about 4 times that of the existing market, overcapacity will naturally lead to industry reshuffle.

Local governments such as Wuhu and Yangzhou have issued preferential measures for LED development. The MOCVD equipment subsidies are particularly high, making the influx of capital and the expansion of LED companies full of blindness and opportunism. In the second and third quarter of this year, with the release of MOCVD production capacity, on the contrary, the downstream shipments have been sluggish, which has naturally led to huge inventory of LED companies.

In mid-November, the domestic leading LED company Sanan Optoelectronics (600703. SH) suddenly announced the exchange of high-level exchange, one of the reasons is the accumulation of serious inventory. Sanan Optoelectronics released its quarterly data this year. It shows that by the end of the third quarter, Sanan’s optical inventories have surged from RMB 310 million at the beginning of the year to RMB 933 million.

"According to the investment plan announced at the beginning of the LED early in the beginning of the year, LED upstream production capacity may advance more than 3 years of market demand for overdrafts." Wang Min, chairman of Jiangxi Jinghe Lighting Company, revealed that at present, at least 1/3 of the production capacity of LED upstream manufacturers has been discontinued. Some companies even stopped production by 50%; LED and packaging companies and applications such as midstream and downstream companies generally underemployed.

However, the excess is not only reflected in the LED upstream capacity, but also the LED downstream market.

Many LED lighting companies stated at the beginning of the year or mid-year that due to the rising prices of rare earth and phosphors, the price of energy-saving lamps was directly increased, making it possible to replace energy-saving lamps with LED lighting. Both overseas markets and domestic markets may have explosive growth. .

In fact, due to the economic downturn in Europe and the United States, most of the LED lighting companies in October this year did not get the expected orders. The domestic LED lighting market is also mainly concentrated in government procurement, some high-level hotels, office buildings and so on. "The penetration of LED lighting in the domestic market is still less than 1%, and it has not really entered the homes of ordinary people," said Zhang Yajun, operations manager of Jihua Optoelectronics. Gong Weibin pointed out that it takes more than 10 years for 8 yuan energy-saving lamps to replace 2 yuan incandescent bulbs. To make 50 yuan LED lamps replace 2 yuan incandescent bulbs is just a dream, consumers will only wait for further price declines.

LED display manufacturer Dongguan Kunshuo general manager Wang Shui-Xian revealed that many LED application companies' expansion strategy is to use 10% to 30% of the total project plan investment to put into production LED projects, to local governments to ask for money, and its Most of the orders are still from government projects.

Soon tomorrow will be in the domestic LED industry shrouded in the crisis of the bubble burst, incandescent lamp elimination plans and early next year may release 8 billion LED lighting subsidies measures, but also to the LED industry to generate new market expectations, Sanan Optoelectronics, Ruifeng The stock prices of LED listed companies such as Optoelectronics and National Star Optoelectronics all reached their daily limit on November 4.

However, according to the plan for the elimination of incandescent lamps, the transition period from now to 2012 will be until October 2012, when incandescent lamps with 100 watts and above will enter the phase-out period, and those with incandescent lamps of 60 watts or more will be eliminated after two years. An LED lighting executive pointed out that now the family is basically using fluorescent lamps, rarely using incandescent lamps above 60 watts, so the elimination of incandescent lamps to promote the development of LED lighting, but also an illusory LED market expectations.

But for LED upstream companies that are capitalized, there are market expectations that are better than none. The reason is that the loss of MOCVD equipment is very large. Wang Lianghai, vice-president of Tongfang, said that if the MOCVD had two furnaces a day, the cost per day would be $10,000 and the one month would be $300,000, but it couldn't be stopped easily.

At present, there are nearly 20 domestic manufacturers of MOCVD equipment that have been put into operation, including Sanan Optoelectronics, Diyuan Optoelectronics, Qianzhao Optoelectronics, Huacan, Shandong Langchao, and Silan Micro. Another consequence of MOCVD equipment that has already been put into production is the irrational expansion of the upstream sapphire substrate. The price of the 2-inch sapphire substrate has dropped from about $35 per piece at the beginning of the year to around $10 per piece.