LED display industry upgrades into a period of rapid development

"The LED display industry has entered a period of rapid development" In 2015, the penetration rate of LED display was only 23%. In 2016, the global LED display market continued to grow rapidly. From the perspective of downstream applications, the general LED display market, which is the main application direction of LED displays, has a global penetration rate of 28% in 2015 and is expected to exceed 31.3% in 2017. The global market size can reach US$34.6 billion. The annual penetration rate can exceed 36%, and the market size exceeds 10% and grows rapidly. In the next 10 years, LED display lamp beads are expected to fully replace all traditional lamp beads.

With the continuous improvement of light efficiency, the cost of chips and other consumables has dropped, and the scale effect has driven the overall cost of lamps to continue to decline. In the next 10 years, it is expected to completely replace all traditional lamp beads. The LED display is intelligent and networked, and the space has been increased by more than 1.3 times. According to Philips, the value of LED display has changed from monomer to interconnected intelligent LED display system and LED display services. The market space is as high as 65 billion euros, which is an increase of 130% compared with the global market size of 30 billion US dollars in 2015.

From the perspective of the upstream supply of LED display screens, the concentration of production capacity in the industry is increasing rapidly, and high industry barriers have been formed to curb the expansion of disorderly production capacity; mid-end packaging technology is constantly innovating to reduce costs and improve efficiency; Under the guidance of new applications such as display screens, small-pitch LED display screens, and the Internet of Things, the industry is expected to start a new round of growth. At the beginning of the new year in 2017, with the further deepening of supply-side reforms and the optimization and upgrading of LED display companies after the merger, the supply-demand relationship will be further improved, and the low-end and backward production capacity will be further eliminated. Recently, LED display companies have frequently received positive news. The sale of Osram LED display vance may be approved by the German government in 2017. Mulinsen plans to build the "Xinyu LED display supporting component project", and Wanrun Technology has established a wholly-owned subsidiary... After the deep reshuffle in the early stage, the upstream (chip), midstream (package) and downstream (application) of the LED display industry are ready to go, and the new year may usher in a new inflection point of performance growth.

In 2014, the number of LED display companies reached more than 20,000, but it decreased by 20% after only one year, and 4,000 companies withdrew from the market. In 2015, China was in a "social transformation period", with more focus and difficulties, lower boiling point and burning point, GDP growth fell below 7%, the lowest growth rate in 25 years. For a time, the LED display industry staged a "price increase carnival", which made people excited.

Opple LED Display released its 2016 annual performance report. The company's total operating income in 2016 increased by 22.55% year-on-year; Foshan LED Display's 2016 revenue exceeded 3.3 billion, and its net profit increased by more than 19 times. From the perspective of the LED display industry cycle, after the deep integration of the industry in 2015 and 2016, the supply-side reform has been relatively sufficient. In 2017, the LED display will usher in a turning point of prosperity. In such a big environment, the LED display industry has experienced fierce competition such as overcapacity, price wars and product homogeneity, and the polarization in the industry is obvious: large enterprises will further expand through mergers and acquisitions, while small and medium-sized enterprises are struggling to survive.

In 2016, there were some signs of recovery in the LED display industry, and many companies raised product prices. In March, packaging companies such as Mulinsen and Jingtai raised the prices of some products. In May, Jingdian's price rose by 15% in the case of a 25% reduction in production.

In August, the price of Sanan Optoelectronics' small and medium-sized products rose by 10%, and Huacan Optoelectronics also adjusted the price of products with lower profits by 5%. Mulinsen, Nationstar Optoelectronics, and Cinda Optoelectronics raised the prices of RGB lamp beads for display screens, and the increases were all around 5%. At the beginning of last year, due to the rise in chip prices, device prices also began to rise. Especially in the display field, manufacturers such as Mulinsen, An Puguang and Cinda Optoelectronics announced price increases at the same time.

Compared with 2015, the price of LED display packaging in 2016 tended to be stable. As a result, LED display packaging companies in the midstream will gradually enter the stage of bottoming out, and the profitability of major manufacturers will gradually improve. Since 2014, fierce market competition has led to a continuous decline in the profitability of manufacturers, and many small and medium-sized packaging companies have been forced to withdraw. The emergence of mergers and acquisitions has also led to the increasing scale of large manufacturers.

In the past, Mulinsen was the only company, but now the scale of Guoxing Optoelectronics and Hongli Huizhi is gradually increasing, and the scale of the second camp is also gradually increasing. This round of production expansion is mainly led by large enterprises, including Mulinsen, Guoxing, Hongli, Cinda and other large manufacturers. The scale of production capacity continues to expand, the market share will continue to expand, and the bargaining power will increase. The four companies that are full of "government" energy have received more than 144 million subsidies. Since 2009, many LED display companies have received government subsidies. As of January 22, 2017, Sanan Optoelectronics has received a total of 358.5 million yuan in subsidies. Huacan Optoelectronics won 222.56 million yuan, and Dehao Runda won 142.0146 million yuan.

In fact, after a round of reshuffle, the targets of government subsidies have changed: currently only those enterprises that can become leaders are subsidized, and the scope of subsidies has been narrowed. Some small and medium-sized enterprises are less likely to receive subsidies, and the trend of survival of the fittest Highlighting the coming of the new year, four LED display companies announced that they had received government subsidies, and the government subsidies announced by the four companies totaled more than 140 million yuan. Among them, Yunnan Blue Crystal Technology Co., Ltd., a wholly-owned subsidiary of the upstream LED display chip company Huacan Optoelectronics, recently received a subsidy of 20 million yuan from the Hongta District Finance Bureau of Yuxi City; Hangzhou Silan Integrated Circuit, a subsidiary of Silan Micro Holdings, Co., Ltd. received 60 million yuan of funding for 8-inch integrated circuit chip production line equipment allocated by the Finance Bureau of Hangzhou Economic and Technological Development Zone. Upstream: LED display chips, increased industry concentration and higher barriers to curb the nihilistic expansion of production capacity. In 2015, there were more than 40 mergers and acquisitions and integration cases in the entire LED display industry chain, involving huge amounts of money.

Jinshajiang Venture Capital Group acquired Lumi LED display screens under Royal Philips of the Netherlands, Kaifajing acquired Preh, and Leyard acquired Pingda Electronics of the United States for 1 billion... After the wave of acquisitions, the concentration of the LED display industry has increased significantly. In 2016, the LED display chip market size was 13.9 billion yuan, a year-on-year increase of 9%, and in 2015 it was a year-on-year decline of 7%. The supply-side reform of the LED display industry chain has been relatively complete. In 2016, the top ten manufacturers accounted for 77% of the market, and the top three were Sanan (29%), Epistar (13%), and HC Semitek (8%).

High industry concentration can effectively curb capacity expansion, enterprises have strong bargaining power, and at the same time improve specialized production efficiency. At the beginning of the new year, Sanan Optoelectronics, the leading domestic LED display chip, issued a price increase notice to the downstream, and raised the prices of some products starting from January 10, 2017, with an increase of 8%. On the one hand, the price increase of Sanan Optoelectronics is due to cost reasons, and on the other hand, it is related to the increase in market concentration.

In the future, the concentration of the LED display chip industry is expected to continue to increase to form an oligopoly, forming a market where the strong are always strong. From the perspective of the supply side, the YOY of mainland enterprises in 2016 was 13%, while that of Taiwan was -2%, indicating that the domestic production rate has increased rapidly. The localization rate was 66% in 2014, 73% in 2015, and 76% in 2016. The localization rate has always been growing.

In 2017, mainstream manufacturers will still expand their production capacity, and the domestic production rate of chips will further increase in the future. Midstream: The localization rate of LED display packaging continues to increase, reaching 66% in 2015 and 67% in 2016. In 2016, the output value of mainland manufacturers was 29.5 billion, with a growth rate of 8%.

The industry concentration continues to increase, with the top ten cities accounting for 39% in 2015 and 43% in 2016. Local manufacturers such as Mulinsen, Guoxing, and Hongli are all in the top ten. In 2016, the market was 58.9 billion, a year-on-year increase of 6%, and in 2015 compared with 2014, it increased by 2%, mainly due to price and terminal demand factors.

The difference between the packaging and chip industries is that there are also international manufacturers. In 2016, the growth rate of mainland manufacturers was 8%, that of Taiwan companies was 1%, and that of international companies was 4%. In the future, the local market will continue to grow the fastest, mainly based on the expansion of production by mainland manufacturers, and the technology gap will continue to narrow, especially in the field of white light, where the advantages of international companies will be eliminated. In 2017, the supply of LED display chips was in short supply, and the leaders benefited steadily. With the strong promotion of the will of the country, the semiconductor industry in the mainland developed rapidly, and the trend of global production capacity shifting to the mainland was obvious.

At present, my country has formed a complete IC industry chain from design, manufacturing, packaging and testing to terminals. With the support of national industrial funds and capital market platforms, it is ushering in the best development opportunities. In 2017, the market characteristics of the industry's short supply were obvious. It is expected that the bargaining power of chip companies will increase in the future, and leading companies will stabilize their income, which in turn will help increase the market concentration of the chip industry.

From a global perspective, with the basic completion of destocking in 2016, the strong demand for smartphone stocking led by Apple in 2017, and driven by emerging markets such as automotive electronics and industrial terminals, chip sales continued to heat up. Since 2015, the market competition of packaging companies has further intensified, and the growth rate of corporate net profits has continued to decline. Companies have begun to focus on the research and development of LED display packaging technology and market development. At present, EMC packaging and CSP chip-scale packaging have become trends. Since EMC was introduced and used in the field of LED display packaging in 2014, it has been greatly developed in indoor LED displays and has quickly become a mainstream product that "compete" with SMD and COB.

With the maturity of LED display applications, the market demand for medium-power LED displays has risen sharply this year, and LED display packaging factories are actively introducing EMC brackets suitable for medium and high power. EMC packaging devices are mainly penetrating into 2-5W products from products below 2W in the past, coupled with the accelerated price decline, it has threatened traditional PPA brackets and ceramic substrates. EMC is an important microelectronic packaging material, which is a highly integrated frame form under the packaging of Molding equipment using new Epoxy materials and etching technology.

Through the packaging process, the semiconductor chip is covered to form a protection, so as not to be damaged by the external environment; at the same time, EMC also has a certain heat dissipation effect. EMC has the characteristics of large-scale production and reasonable reliability, and is one of the common packaging materials for semiconductor packaging. It has the characteristics of high heat resistance, UV resistance, high integration, high current, small size, and high stability. There are outstanding advantages in the field of backlighting.

CSP is also the most topical packaging form in the packaging industry nowadays. It has low luminous efficiency, difficult welding, consistent light color, and high cost price. However, its small light-emitting surface, high optical density, uniform color, and small size can increase the flexibility of the application. There is great potential for cost reduction, especially in LED display bulbs and LED display tubes, which have excellent design flexibility and have become a blue ocean market that major companies are vying for. With the continuous release of the scale effect of CSP products, the cost performance will be further improved. It is estimated that in the next three years, the market share of CSP and flip-chip products will reach more than 30%, and it will also become the best for Chinese LED display packaging companies to surpass foreign companies in an all-round way. Chance. At this stage, Philips, Cree, Osram, Samsung and other international giants have successively launched flip-chip LED display chips and CSP chip-scale packaging products.

Domestic CSP chip-level packaging is still in the research and development period. Domestic chip companies such as Dehao Runda are planning to use 500 million yuan to build LED display chip-level packaging projects. In the future, flip-chip and chip-level packaging products will be launched one after another. .