LED chips are no longer "talking about price changes", high voltage / flip / high light effect to open "new opportunities"

In 2016, the LED industry intensified the reshuffle, and the backward production capacity was accelerated, resulting in a gradual increase in industry concentration. In this context, LED chip price competition has further returned to rationality, and the industry is welcoming rare market opportunities.

According to the statistics of the High-tech Research Institute LED Research Institute (GGII), the market size of China's LED chip industry in 2016 exceeded RMB 14.5 billion, a year-on-year increase of 11.54%, an increase of 3.2 percentage points over 2015.

Affected by the changes in raw material prices and the relationship between supply and demand in the second half of last year, the price increase has become one of the external performances of chip companies' profitability improvement.

According to financial report data, Huacan Optoelectronics' sales of LED chips in 2016 increased by 130.96% compared with the previous year. At the same time, the acquisition of blue crystal technology increased the sales revenue of substrate wafers, and realized operating income of 1.582 billion yuan, an increase of 65.62% over the same period of last year; net profit of 2.67 100 million yuan, an increase of more than 100% over the same period last year.

The high-yield research institute LED Research Institute (GGII) believes that the price of LED chips has stabilized and rebounded in 2016, and the market demand is in good condition. However, LED chip manufacturers continue to expand the scale of production expansion, making small and medium-sized chip factories dare not act blindly, and are in a wait-and-see attitude. On the other hand, the narrowing of MOCVD subsidies has further exacerbated this trend.

The continuous and fierce price competition has finally forced some companies to abandon some markets. Some have reduced cash flow expenses by temporarily compressing production capacity, and some have been directly eliminated by market competition.

Shi Songgang, director of marketing of Huacan Optoelectronics, said: "In the past two years, the expansion of chip capacity is lower than packaging and application. The overall supply and demand of the market is still relatively tight. As the market share becomes more concentrated, this pair of chip factories, packaging plants, application plants Leading companies are good news. Now LED chip production capacity is mainly concentrated in Huacan Optoelectronics, Sanan Optoelectronics, and Auyang Shunchang. It is expected that production capacity will begin to gradually release in the third quarter of this year."

Hua Can Optoelectronics Marketing Director Shi Songgang

Huacan Optoelectronics expects to expand production by two times in 2017, and the capacity at the end of this year will reach 1.7 million pieces/month (blue-green & red-yellow). Among them, the company's display chip is a leader in the segmentation industry, especially benefiting from the growing market demand for small-pitch display screens. At the end of 2016, the company's product market share reached 50%.

In terms of lighting chip products, Huacan Optoelectronics also has core unique advantages, such as high-voltage chips, flip chip, filament chip, high-efficiency chip and other international advanced technology solutions, and its market share remains the top two in China.

Regarding the new market, Huacan Optoelectronics has also been in the early stage. Infrared LED is expected to be mass-produced by the end of this year. The cooperation with famous manufacturers to develop the Micro-LED project has also achieved initial results. Deep UV & laser active technology research and development preparation.

As we all know, the quality of LED chips has a great impact on the quality of downstream packaging or end products. Customers have higher requirements for the consistency, stability and light decay of LED chips. Huacan Optoelectronics always keeps innovating and optimizing its product technology, reaching the international first-class technology level and gaining recognition from mainstream customers in the industry.

The advantages of high-voltage chips are expected to become mainstream in the market

In recent years, the design of LED lighting fixtures has been more simplistic and lighter, and high-voltage chips are favored by the market for their flexibility, diversity and low cost.

According to Shi Songgang's analysis, “Customers are increasingly demanding high-voltage chips. On the one hand, from the perspective of lighting design, high-voltage and linear IC itself is a big trend; on the other hand, from the perspective of cost-effectiveness and efficiency of the entire LED industry chain. It also has obvious advantages, which has greatly increased the production capacity of enterprises."

Up to now, many traditional large manufacturers in the market have begun to apply high voltage chip products in the field of lighting. Huacan Optoelectronics is the earliest enterprise in China to lay out high-voltage chips. High-voltage chip products have established a good reputation in the end customers, and the market share has increased significantly in 2016.

Of course, high-voltage chips have high requirements for chips, packages, and finished products. Compared with traditional chip products, high-voltage chips focus on improving the cost performance of the entire application. "In the early days, high-voltage chips were used in lighting and bulb markets. Now some street lamp manufacturers are considering using high-voltage chips." Shi Songgang told Gaogong LED.

As the leader of high-voltage chips, Huacan Optoelectronics has formed a large-scale production. Its product advantages are mainly reflected in reliability, product performance and product serialization.

In Shi Songgang's view, "others do high voltage products are looking at the voltage field of 30V, 50V or even higher, and Huacan Optoelectronics' high voltage chip is the first to look at the general lighting market. Now the production capacity of Huacan high voltage chip is close to 1000KK. /month."

Cutting into the market, the spring of flip chip is coming

In the past two years, domestic chip manufacturers have gradually increased the production of flip-chip chips. Huacan Optoelectronics has accumulated many years of experience in flip-chip research and development, and has launched a full-scale flip-chip "Yao" series of LED chips. Through technological optimization, further breakthroughs have been made in light efficiency, and the application market has continued to expand.

LED flip chip has broad application prospects in the fields of vehicle lights, high-power lighting, large-size backlight, COB lighting, and flash lamps.

"As far as the domestic market is concerned, some high-end markets are not particularly sensitive to the price of flip-chip products. However, the price of the domestic lighting market cannot be avoided because the domestic dress price has been very cheap, and the price of the flip-chip will be relatively low. Slightly expensive." Shi Songgang said that with the advancement of technology and mature industrial support, the market scale will gradually expand, and the cost of flipping will have a certain room for decline.

In Shi Songgang's view, the general lighting market is still dominated by the main chip. Flip chip will gradually develop its special features in the special application market with its unique high reliability. In the future, flip chip will become a long time in the future. Mainstream.

Price return to rational high-efficiency LED demand can be expected

Hua Can's high-efficiency chip products, Shi Songgang said frankly, "We have been continuously improving the light efficiency and can achieve products above 220lm/W according to market demand." With the accelerated expansion of Huacan Optoelectronics' overseas business, Huacan is highly efficient. Product word of mouth and share will be further enhanced.

With the release of DLC4.2, some high-end demand in the North American market, demand for high-efficiency products has grown very rapidly this year, and then the trend of global energy-saving emission reduction, high-efficiency demand will continue to grow.