[High-tech LED reporter / Yue Mengdi] Twenty participating epitaxial chip companies, MOCVD mass production machines totaled 547 units, accounting for about 50% of China's MOCVD reserves, accounting for 70% of the actual number of production machines. The total actual investment of the 20 enterprises totaled 42.96 billion yuan, accounting for about 50% of the total investment in China's epitaxial chip industry.
The above data sets reflect the deep meaning behind the 2014 LED chip company CEO Roundtable Summit hosted by Gaogong LED and hosted by Tsinghua Tongfang on June 22, 2014.
"This is an unprecedented meeting. In the history of China's LED industry development, it is the first time that the leaders of chip companies have gathered together to discuss the key period of industry development, and how to strive for the turning development opportunities in the field of LED upstream epitaxial chips through horizontal cooperation. "The summit organizer - Dr. Zhang Xiaofei, Chairman of Gaogong LED, gave a speech on the speciality and significance of this summit.
Nantong Tongfang Semiconductor, Foshan Guoxing Semiconductor, Xi'an Huaxin Lihua, Jingwang Optoelectronics, Yuanrong Optoelectronics, Huacan Optoelectronics, Xiamen Dry Photoelectric, Shanghai Blu-ray, Yingrui Optoelectronics, Guangdong Deli Optoelectronics, Diyuan Optoelectronics, Xiangneng Hualei Optoelectronics, Jingneng Optoelectronics, Jiangsu Aoyang Shunchang, Jiangsu Xinguanglian, Jucan Optoelectronics, Suzhou Xinnajing Optoelectronics, Jiangsu Zhonggu Optoelectronics, Huayanxinguang, Yangzhou Zhongke Semiconductor, etc. More than 20 Chinese mainland LED epitaxial chips Corporate executives attended the round-table closed-end summit.
After the chip industry has passed the downturn caused by overcapacity in the past few years, with the start of downstream LED lighting market demand, it began to recover. In the first half of 2014, due to the rapid growth of demand in the downstream application market, the LED lighting industry has brought short-term benefits to the entire upstream. The shortage of supply in the chip market in the first half of last year has led to a new round of expansion.
On the one hand, the R&D capabilities of mainland LED epitaxial chip companies have been greatly improved, especially in the first half of this year, which has regained confidence in many companies, but price and capacity pressures still exist. In particular, the stalemate of the expansion and non-expansion of the upstream market at the turning point of the market has made the industry consolidation trend more apparent.
Although the LED downstream lighting market is advancing steadily, the decline in chip prices has gradually stopped, but the market environment is not optimistic. How to go in the future is a common concern of chip manufacturers.
How China's LED epitaxial chip companies survive, develop and grow in the era of LED lighting has become the starting point of the summit's theme of "change opportunities, competition and competition".
Chip companies confusion <br> <br> last year, LED lighting ushered in the explosive growth of demand, upstream chip factories seemingly also usher in the industry in the spring, but in fact the general performance is not satisfactory, not incremental increased profits The dilemma has not improved significantly.
Where is the way out? At the summit, many business leaders expressed such doubts.
Sanan Optoelectronics and Dehao Runda, two companies that relied on government subsidies and invested heavily in MOCVD machines, further squeezed the market's profitability and survival space through continuous production capacity and price competition. The second and third-line chip factories are not as obvious in the price war as the above two companies, but they still have the market space for their survival.
However, the market space seems to be getting smaller. Enterprises have reached a crossroads, government subsidies have gradually decreased, and how to develop in the future is a problem that most companies are confused.
The organizer of this summit--Wang Lianghai, vice president of Tsinghua Tongfang, expressed his views. In the LED industry in China, as Tsinghua Tongfang, I think we should first jump out of the position of a company. From the perspective of a company with social responsibility, I think we should organize everyone to discuss it.
I think that the behavior, competition and natural elimination of the market are indeed the laws of industrial development. However, I think that an industry cannot simply use the market law because the LED epitaxial chip is too expensive in the early stage of the industry and has high technical requirements. For so many years of development, whether it is a state, an institutional investor or an individual, we must cherish it. Because all investments are profit-seeking, managers as companies should let capital work, and should not let the various vicious shocks of the market.
Dr. Zhang Xiaofei said that everyone knows that summer is coming, and the price of the chip market and the competition of customers are becoming increasingly fierce. Midstream packaging companies are taking advantage of the relatively fragmented status of the upstream epitaxial chip industry, and constantly exerting pressure on prices.
In the current situation of short supply in the market, the upstream enterprises are very entangled. First, the price, weak competitiveness may mean the loss of a small number of customers in the short term; second, the scale effect, whether to expand the factory, especially in previous years. Under the premise that huge investment has not achieved the expected return, each company is very embarrassed about continuing to expand production.
From the perspective of the reasonable profit distribution ratio of the industrial chain, the upstream should be better than the middle and lower reaches of the industry in terms of technology research and development and equipment investment, but the reality is that the output value of the middle and lower reaches and the profit and gross profit are higher than the upstream. much better.
The LED upstream epitaxial chip industry has reached the point where it must make a choice, whether to continue to maintain this status quo, or to change. The high-tech LED sponsored the LED upstream chip company CEO round table summit is to hope that through the closed-door round-table dialogue of more than 20 mass production chip companies to discuss the future cooperation feasibility and possible cooperation methods.
Seeking new opportunities in the competition. "In the age of melee, isolated guerrillas cannot survive." Dr. Zhang Xiaofei said.
In fact, since the first half of last year, mergers and acquisitions of upstream upstream chip companies have been surging. Cases of Ganzhao Optoelectronics' acquisition of Dongguan Zhoulei Electronics and Yuanrong Optoelectronics' acquisition of Jiangxi Ruineng Technology have emerged.
From the current market competition pattern, cooperation is the most urgent. Because this situation continues to develop, for most upstream epitaxial chip companies, there is more or less market risk. From market cooperation to technical cooperation, we can cross-license on patents to prevent international companies from launching patent litigation against Chinese companies in the context of rising market demand. This is something we must guard against.
In the past few years, due to fierce competition with peers in the mainland, the ecology of the LED epitaxial chip industry in Taiwan has begun to change, and there has been a continuous horizontal or vertical integration and mergers and acquisitions. Li Bingjie, chairman of Jingyuan Optoelectronics, even believes that the next two years will be the key period for the development of LED chip manufacturers and packaging manufacturers. The LED industry in Taiwan will complete integration and mergers and acquisitions between enterprises by 2015, when Taiwan will be possible. There will be only two remaining chip makers.
Taiwan’s past experience is, in a sense, our present day. The driving force behind the development of capital in the upstream industry is very obvious. In particular, the epitaxial chip companies in mainland China have different capital backgrounds behind them. Whether it is state-owned enterprises, listed companies or venture capital, the complexity of equity of many enterprises brings a lot of confusion to their own positioning and decision-making.
The benefits brought by the integration of upstream industries are self-evident, on the one hand, more efficient use of capital and human resources, on the other hand, it can reduce the bargaining space of LED downstream enterprises, and at the same time use market means to eliminate a group of uncompetitive small and medium-sized enterprises. .
Nowadays, the customers of many of our chip companies are relatively dispersed, especially the bottlenecks in the margin of productivity caused by the diversification of demand from downstream packaging and lighting companies.
In the long run, the midstream and downstream industries are also in the integration stage. According to the forecast of the High-tech LED Industry Research Institute, nearly two-thirds of SMEs will withdraw in the next three years. So in this very critical period, at least in the current situation, we can have time to plan ahead, to see farther and stand taller.
Dr. Zhang Xiaofei said that in the future development of China's LED industry, today's meeting must be a milestone, and its impact will even determine the direction of LED industry development in China.
As the saying goes, combining the two benefits, the points are even more harmful. We can sit together today and we should work together. For example, in some subdivisions, everyone can do lighting, backlighting, and complement each other by combing their strengths and weaknesses. If we go a little further and zoom in, we also face long-term competition from overseas companies.
If 200 MOCVDs are divided into 10 companies, 20 each, and 100 companies each, the difference in technology development, operation and sales costs is huge. We can't form a virtual community (strategic alliance) in some way. For example, Taiwan's Pan-Guangzhou Electric Power Alliance, through further promotion from product cooperation to joint ventures, equity participation, etc., each develops customers according to brand strategy and market segmentation, and competes hand in hand. LED lighting market pie.
The group can only be strong, although the group may not be able to grab the market with the first-line chip makers, but at least it can add a few odds in the market competition. Kang Jian, general manager of Yuanrong Optoelectronics, expressed at the summit that “in addition to continuing to introduce investors, companies can seek a better way of cooperationâ€.
Dr. Du Xuehong, the general manager of Guoxing Semiconductor, also pointed out that their market strategy is to rely on the platform of industrial chain integration and take the road of differentiated development.
Xiang Yundong, executive deputy general manager of Xiangneng Hualei Optoelectronics, also said at the summit: "We hope that through cooperation, we can promote everyone to become bigger and stronger and promote the development of this industry."
In addition to investment promotion and cooperation, the technology upgrade of the chip factory will become an important weight to enhance the viability and competitiveness of enterprises, reduce costs and increase profits.
Xu Chunchao, vice president of Shanghai Yingrui Optoelectronics Co., Ltd. said that this year the company will introduce flip chip technology, and then reduce the cost of the product structure to improve the overall gross profit margin of the company. But at the same time, he also admits that there are some difficulties in promoting flip chip, whether the enterprise's independent investment or the introduction of packaging factory cooperation, how to reduce costs and so on are all the next considerations.
Dr. Wang Hui, manager of Xin Najing Optoelectronics Extension Department, also said: "As a technician, I care about the improvement of product performance and improve the market for better products. This is our goal."
The development of any industry will go through the process from the germination period to the outbreak period to the maturity stage. The chip industry is in the process of entering the maturity period. In the future chip market, there are still many technologies waiting for breakthroughs. Each manufacturer may have different technical conditions, and the main direction is different, and the development status will be different.
With the pace of mergers and acquisitions in the second half of the year, some companies may withdraw from the market, some companies will seek opportunities for horizontal integration or integration, and some enterprises may participate in the vertical integration of the middle and lower reaches.
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The above data sets reflect the deep meaning behind the 2014 LED chip company CEO Roundtable Summit hosted by Gaogong LED and hosted by Tsinghua Tongfang on June 22, 2014.
"This is an unprecedented meeting. In the history of China's LED industry development, it is the first time that the leaders of chip companies have gathered together to discuss the key period of industry development, and how to strive for the turning development opportunities in the field of LED upstream epitaxial chips through horizontal cooperation. "The summit organizer - Dr. Zhang Xiaofei, Chairman of Gaogong LED, gave a speech on the speciality and significance of this summit.
Nantong Tongfang Semiconductor, Foshan Guoxing Semiconductor, Xi'an Huaxin Lihua, Jingwang Optoelectronics, Yuanrong Optoelectronics, Huacan Optoelectronics, Xiamen Dry Photoelectric, Shanghai Blu-ray, Yingrui Optoelectronics, Guangdong Deli Optoelectronics, Diyuan Optoelectronics, Xiangneng Hualei Optoelectronics, Jingneng Optoelectronics, Jiangsu Aoyang Shunchang, Jiangsu Xinguanglian, Jucan Optoelectronics, Suzhou Xinnajing Optoelectronics, Jiangsu Zhonggu Optoelectronics, Huayanxinguang, Yangzhou Zhongke Semiconductor, etc. More than 20 Chinese mainland LED epitaxial chips Corporate executives attended the round-table closed-end summit.
After the chip industry has passed the downturn caused by overcapacity in the past few years, with the start of downstream LED lighting market demand, it began to recover. In the first half of 2014, due to the rapid growth of demand in the downstream application market, the LED lighting industry has brought short-term benefits to the entire upstream. The shortage of supply in the chip market in the first half of last year has led to a new round of expansion.
On the one hand, the R&D capabilities of mainland LED epitaxial chip companies have been greatly improved, especially in the first half of this year, which has regained confidence in many companies, but price and capacity pressures still exist. In particular, the stalemate of the expansion and non-expansion of the upstream market at the turning point of the market has made the industry consolidation trend more apparent.
Although the LED downstream lighting market is advancing steadily, the decline in chip prices has gradually stopped, but the market environment is not optimistic. How to go in the future is a common concern of chip manufacturers.
How China's LED epitaxial chip companies survive, develop and grow in the era of LED lighting has become the starting point of the summit's theme of "change opportunities, competition and competition".
Chip companies confusion <br> <br> last year, LED lighting ushered in the explosive growth of demand, upstream chip factories seemingly also usher in the industry in the spring, but in fact the general performance is not satisfactory, not incremental increased profits The dilemma has not improved significantly.
Where is the way out? At the summit, many business leaders expressed such doubts.
Sanan Optoelectronics and Dehao Runda, two companies that relied on government subsidies and invested heavily in MOCVD machines, further squeezed the market's profitability and survival space through continuous production capacity and price competition. The second and third-line chip factories are not as obvious in the price war as the above two companies, but they still have the market space for their survival.
However, the market space seems to be getting smaller. Enterprises have reached a crossroads, government subsidies have gradually decreased, and how to develop in the future is a problem that most companies are confused.
The organizer of this summit--Wang Lianghai, vice president of Tsinghua Tongfang, expressed his views. In the LED industry in China, as Tsinghua Tongfang, I think we should first jump out of the position of a company. From the perspective of a company with social responsibility, I think we should organize everyone to discuss it.
I think that the behavior, competition and natural elimination of the market are indeed the laws of industrial development. However, I think that an industry cannot simply use the market law because the LED epitaxial chip is too expensive in the early stage of the industry and has high technical requirements. For so many years of development, whether it is a state, an institutional investor or an individual, we must cherish it. Because all investments are profit-seeking, managers as companies should let capital work, and should not let the various vicious shocks of the market.
Dr. Zhang Xiaofei said that everyone knows that summer is coming, and the price of the chip market and the competition of customers are becoming increasingly fierce. Midstream packaging companies are taking advantage of the relatively fragmented status of the upstream epitaxial chip industry, and constantly exerting pressure on prices.
In the current situation of short supply in the market, the upstream enterprises are very entangled. First, the price, weak competitiveness may mean the loss of a small number of customers in the short term; second, the scale effect, whether to expand the factory, especially in previous years. Under the premise that huge investment has not achieved the expected return, each company is very embarrassed about continuing to expand production.
From the perspective of the reasonable profit distribution ratio of the industrial chain, the upstream should be better than the middle and lower reaches of the industry in terms of technology research and development and equipment investment, but the reality is that the output value of the middle and lower reaches and the profit and gross profit are higher than the upstream. much better.
The LED upstream epitaxial chip industry has reached the point where it must make a choice, whether to continue to maintain this status quo, or to change. The high-tech LED sponsored the LED upstream chip company CEO round table summit is to hope that through the closed-door round-table dialogue of more than 20 mass production chip companies to discuss the future cooperation feasibility and possible cooperation methods.
Seeking new opportunities in the competition. "In the age of melee, isolated guerrillas cannot survive." Dr. Zhang Xiaofei said.
In fact, since the first half of last year, mergers and acquisitions of upstream upstream chip companies have been surging. Cases of Ganzhao Optoelectronics' acquisition of Dongguan Zhoulei Electronics and Yuanrong Optoelectronics' acquisition of Jiangxi Ruineng Technology have emerged.
From the current market competition pattern, cooperation is the most urgent. Because this situation continues to develop, for most upstream epitaxial chip companies, there is more or less market risk. From market cooperation to technical cooperation, we can cross-license on patents to prevent international companies from launching patent litigation against Chinese companies in the context of rising market demand. This is something we must guard against.
In the past few years, due to fierce competition with peers in the mainland, the ecology of the LED epitaxial chip industry in Taiwan has begun to change, and there has been a continuous horizontal or vertical integration and mergers and acquisitions. Li Bingjie, chairman of Jingyuan Optoelectronics, even believes that the next two years will be the key period for the development of LED chip manufacturers and packaging manufacturers. The LED industry in Taiwan will complete integration and mergers and acquisitions between enterprises by 2015, when Taiwan will be possible. There will be only two remaining chip makers.
Taiwan’s past experience is, in a sense, our present day. The driving force behind the development of capital in the upstream industry is very obvious. In particular, the epitaxial chip companies in mainland China have different capital backgrounds behind them. Whether it is state-owned enterprises, listed companies or venture capital, the complexity of equity of many enterprises brings a lot of confusion to their own positioning and decision-making.
The benefits brought by the integration of upstream industries are self-evident, on the one hand, more efficient use of capital and human resources, on the other hand, it can reduce the bargaining space of LED downstream enterprises, and at the same time use market means to eliminate a group of uncompetitive small and medium-sized enterprises. .
Nowadays, the customers of many of our chip companies are relatively dispersed, especially the bottlenecks in the margin of productivity caused by the diversification of demand from downstream packaging and lighting companies.
In the long run, the midstream and downstream industries are also in the integration stage. According to the forecast of the High-tech LED Industry Research Institute, nearly two-thirds of SMEs will withdraw in the next three years. So in this very critical period, at least in the current situation, we can have time to plan ahead, to see farther and stand taller.
Dr. Zhang Xiaofei said that in the future development of China's LED industry, today's meeting must be a milestone, and its impact will even determine the direction of LED industry development in China.
As the saying goes, combining the two benefits, the points are even more harmful. We can sit together today and we should work together. For example, in some subdivisions, everyone can do lighting, backlighting, and complement each other by combing their strengths and weaknesses. If we go a little further and zoom in, we also face long-term competition from overseas companies.
If 200 MOCVDs are divided into 10 companies, 20 each, and 100 companies each, the difference in technology development, operation and sales costs is huge. We can't form a virtual community (strategic alliance) in some way. For example, Taiwan's Pan-Guangzhou Electric Power Alliance, through further promotion from product cooperation to joint ventures, equity participation, etc., each develops customers according to brand strategy and market segmentation, and competes hand in hand. LED lighting market pie.
The group can only be strong, although the group may not be able to grab the market with the first-line chip makers, but at least it can add a few odds in the market competition. Kang Jian, general manager of Yuanrong Optoelectronics, expressed at the summit that “in addition to continuing to introduce investors, companies can seek a better way of cooperationâ€.
Dr. Du Xuehong, the general manager of Guoxing Semiconductor, also pointed out that their market strategy is to rely on the platform of industrial chain integration and take the road of differentiated development.
Xiang Yundong, executive deputy general manager of Xiangneng Hualei Optoelectronics, also said at the summit: "We hope that through cooperation, we can promote everyone to become bigger and stronger and promote the development of this industry."
In addition to investment promotion and cooperation, the technology upgrade of the chip factory will become an important weight to enhance the viability and competitiveness of enterprises, reduce costs and increase profits.
Xu Chunchao, vice president of Shanghai Yingrui Optoelectronics Co., Ltd. said that this year the company will introduce flip chip technology, and then reduce the cost of the product structure to improve the overall gross profit margin of the company. But at the same time, he also admits that there are some difficulties in promoting flip chip, whether the enterprise's independent investment or the introduction of packaging factory cooperation, how to reduce costs and so on are all the next considerations.
Dr. Wang Hui, manager of Xin Najing Optoelectronics Extension Department, also said: "As a technician, I care about the improvement of product performance and improve the market for better products. This is our goal."
The development of any industry will go through the process from the germination period to the outbreak period to the maturity stage. The chip industry is in the process of entering the maturity period. In the future chip market, there are still many technologies waiting for breakthroughs. Each manufacturer may have different technical conditions, and the main direction is different, and the development status will be different.
With the pace of mergers and acquisitions in the second half of the year, some companies may withdraw from the market, some companies will seek opportunities for horizontal integration or integration, and some enterprises may participate in the vertical integration of the middle and lower reaches.
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