Secret domestic LED chip: 35% project is not put into production

Not long ago, the website of the Ministry of Science and Technology released the "12th Five-Year Plan for Semiconductor Lighting Technology Development" ("Planning"), and "Planning" pointed out that more than 80% of LED chips will be domesticated, and large-scale chips will be domestically produced. The MOCVD (Metal Organic Chemical Vapor Deposition) equipment and key raw materials are domestically produced. Can Foshan Xurui Optoelectronics shut down the incident, so that the majority of investors on China's LED chip project painted a question mark, Xu Rui photoelectric shutdown event will be the tip of China's many LED chip project it?

Since 2009, China's LED chip industry has set off an investment boom that has continued until the end of 2011. The investment policies of local governments and their huge market prospects have spawned batches of LED epitaxial wafer projects. However, the LED application market is growing at a slower rate than expected. The overcapacity staged surplus has caused the LED chip market to be a Red Sea. Most LED chip projects have had to slow down and some projects have even been forced to quit.

According to statistics, there are a total of 46 LED chip projects in China between 2009 and 2010. Up to now, 16 projects have not been put into production, accounting for 35% of the total projects.

The slow progress of most projects shows that most of the project progress has been slow since the establishment of the China LED chip project between 2009 and 2010.

Note: The number of projects is divided into bases, for example, two projects of Wuhu BDO Runda and Yangzhou BDO Runda.

Of the 46 projects, only 20 LED chips have been put into production, accounting for 43% of the total number of projects. At the beginning, 46 projects were planning to introduce 1,220 MOCVDs. At present, only 436 MOCVDs are in place, and 436 MOCVD plants are actually less than half.

In the planning of 46 LED chip projects, there are still 16 projects that have not been put into production, accounting for 35% of the project volume. Among them, only five projects involved the introduction of MOCVD equipment, namely BDO Runda, Yangzhou Longyao, Yixing Arctic Haotian, Foshan Guoxing Semiconductor and Fujian Hanjing. The above-mentioned five companies introduced 44 sets.

The number of LED chips that have exited or have not progressed is 10, accounting for 22% of the total number of projects. When tracking the progress of the above projects, Gaogong LED Industry Institute learned that the market demand is not as expected and the shortage of talents is the main reason for the slow progress of LED chip projects.

Judging from the LED chip project that has already been put into production, only a few domestic projects can be carried out as scheduled.

Sanan Optoelectronics is the leading LED chip industry in mainland China. The Anhui San'an project is the fastest-growing of all LED chip projects. On February 6, 2010, construction began in the Wuhu Economic Development Zone. On the same day the following year, the project began production. As of the end of April 2012, Anhui San'an introduced a total of 107 MOCVD units, and 50 units have been put into operation. The remaining equipment has also been commissioned.

The BDO Runda Lugu Project has also made rapid progress. By the end of April 2012, 50 MOCVD have been introduced, but only 14 MOCVD plants have been put into operation.

The Ganzhao Photoelectric Yangzhou project started construction in July 2009 and was put into operation at the end of August 2010. From the time of construction start to production, it has been used for 13 months. At present, 21 sets of MOCVD have been introduced and basically all have been put into operation. In 2011, the operating income reached 200 million yuan.

In addition, the Nantong Tongfang Project and the Hefei Rainbow Blu-ray Project have already introduced dozens of MOCVD, and some of them have been put into production. In addition to the above-mentioned several LED chip projects, the progress of other projects is relatively slow, Foshan Xu Rui photoelectric is one of the typical.

On February 26, 2010, Foshan Xurui Optoelectronics laid the foundation for a total planned investment of US$350 million in three phases. It is expected that 100 MOCVD will be introduced before the end of 2013.

However, the survey found that as of the end of March this year, Xu Rui photoelectric introduced MOCVD only 11 sets, only 2 units were put into operation, and 2 MOCVD equipment in trial production.

In late April of this year, Xu Rui Optoelectronics has stepped into an increasingly high inventory, sales of poor sales of the dilemma, stop production or cut production has become inevitable. Xu Rui photoelectric executive team changes, but only to accelerate the emergence of this inevitable result.

In addition, the progress of the BYD project in Huizhou is also relatively slow. After the introduction of five MOCVD units in December 2010, it has not been introduced yet.

BYD invested 1.2 billion in the entire LED industry chain, focusing on the lighting industry. Its chips are mostly internally digested by itself, but the LED lighting market demand is not as expected, resulting in a relatively low capacity utilization rate. As of November 2011, only two of the five MOCVD systems it introduced had been put into operation.

Xu Rui's suspension of production by non-accidental statistics of the chip projects that have been put into production, the average LED chip project from the start of construction to the average production time is 14 months. In the past 16 months since the end of 2010, 35% of the chip projects that were established between 2009 and 2010 have not yet been put into production. Most of the projects have not yet introduced MOCVD equipment. Even if most of the projects that have already been put into production are small-scale mass production, the capacity utilization rate is not high. .

The slow progress of domestic LED chip projects, first of all because of overheated investment and excess production capacity.

In 2010, China's LED epitaxial wafer industry increased its contracted investment by 137.8 billion yuan, and in 2011 it was 89 billion yuan. Affected by the investment boom in the LED chip industry, many chip projects have had to slow down the pace of progress. Some projects that do not have strong background support are forced to withdraw.

Second, the lack of domestic LED application market demand led to a surplus of LED chip market, from the seller's market to the buyer's market, LED chips decline in a straight line, the market operating conditions deteriorated. From mid-2009 to mid-2010, the LED chip market was still a seller's market and was not sold at all. This is also the main period for the domestic LED chip new project planning in 2009-2010. However, from the second half of 2010, due to the gradual release of production capacity and the lack of market demand, LED chip price war started, the market also has a seller's market to the buyer's market.

In 2011, the growth rate of LED application market was not as fast as the capacity expansion rate, especially LED backlighting. The market demand was worse than expected and the market was a Red Sea. Finally led to the majority of domestic LED chip manufacturers in a loss state in 2011, the average price of LED chips fell by more than 40% throughout the year.

In addition, in the first half of 2010, due to the tight supply of global LED chips, some Taiwanese outsourcing manufacturers increased the price of LED epitaxial wafers by 20%-35%. The average gross margin of the industry exceeded 50%, and the net interest rate exceeded 40%. One of the incentives for overheating chip projects.

With the increasingly fierce market competition, LED chip high gross margin is no longer, in 2011 the domestic chip giant Sanan photoelectric LED chip gross margin was only 26%, but also for those who are directed at the high gross margin into the LED chip industry investors deterred.

There is also a relatively high technical threshold for the LED chip industry, and there is a significant lack of sufficient technical personnel in the country. At present, most chip manufacturers in China are basically introducing technology teams from Taiwan or abroad. There are relatively few local teams in mainland China.

The above reasons have led directly to the slow progress of most Chinese LED chip projects. In addition, many LED chip projects also have management teams, technical routes, product positioning and other factors.

It can be said that Xu Rui photoelectric cease production, is only a microcosm of most LED chip projects difficult, dilemma a microcosm.