The LED market pattern will change after the buffer period

The enthusiasm for the layout of the LED industry in China by Taiwanese companies is still continuing. Taiwan's LED faucet Yanyuan Optoelectronics invested in Yangzhou, Yangyang Optoelectronics officially put into operation on the 18th of this month. This is the third investment action in the past two months after the semiconductor foundry giant UMC in Shandong Jining and panel giant AUO landed in Tianjin.

He Zaihua, a senior researcher at China Investment Consulting, pointed out that the domestic support policy for semiconductors is the direct cause of the semiconductor market. With the advancement of the LED wave, the Chinese market has once again become a battleground for military strategists. China is a major LED street light application country and the largest consumer of LED lighting. The potential market scale is quite prominent. In addition to demand-driven, the Chinese market also has unique advantages in manufacturing, such as labor cost advantages and raw material price advantages.

Among the many local support policies, the subsidies for Yangzhou and Wuhu are more prominent. Basically, subsidies for imported MOCVD equipment are directly subsidized. The strong subsidies directly guide leading enterprises in the layout of the two places and plan large-scale production capacity. According to statistics, there are currently 1,466 MOCVD equipment imported by mainland manufacturers, which is equal to the total number of global MOCVD in 2006. By the end of 2009, there were only 1,200 MOCVD equipment in operation worldwide.

Under the competitive pressure of mainland manufacturers, Taiwanese companies and Korean companies have entered the mainland, and opened up a wave of local strategic layout. Not only the upstream of the industrial chain, but also the front line has expanded to include LED applications. In some areas, although domestic brands still dominate the market, with the diversion of other manufacturers, the market pattern will change significantly. After the local preferential policies are gradually cooled down, the new round of siege will rely on the strength of each.

According to the “2010-2015 China Semiconductor Lighting (LED) Industry Investment Analysis and Forecast Report” issued by China Investment Consultant, MOCVD is a key production equipment, and local governments in the mainland usually give high subsidies. In the downstream application field, lighting companies are actively involved, and traditional lighting companies are also following the pace of the LED industry and stepping up. The first half of 2011 belongs to the promotion and introduction period of LED lighting, and the large-scale rise of LED lighting applications is not far behind.

Zhang Yulin, research director of China Investment Consulting, pointed out that the first half of 2011 will be the delivery period and buffer period of the equipment. Therefore, the LED market will not have a prominent phenomenon. With the continuous breakthrough of new technologies, the cost is expected to fall more than expected. In other words, after a period of rest and recovery, the LED industry will usher in a large-scale capacity explosion and fierce competition.

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