LED screen upstream enterprise pattern continues to solidify


The concentration of the LED industry chain has been further improved, the industrial chain structure has continued to solidify, and the industry leaders have benefited deeply. Focus on the sectoral opportunities of the LED industry chain, and the chip link will benefit the most. Optimistic about chip leaders: Aoyang Shunchang, Sanan Optoelectronics; packaging leaders: Mulinsen, Hongli Zhihui.

LED screen upstream chip manufacturers are at the core of the LED industry chain, leading listed companies such as Aoyang Shunchang, Sanan Optoelectronics and so on. After the completion of the second phase of Aoyang Shunchang this year, the total production capacity will reach 800,000 pieces/month. Sanan Optoelectronics has been making continuous moves recently, completing the second phase of the employee stock ownership plan to purchase nearly 91.7 million shares, deploying chip materials and compound semiconductors, and signing the "Development Financial Cooperation Agreement" with China Development Bank. The company's focus on LED chips, integrated circuits and other fields is accelerating Overseas mergers and acquisitions and capacity expansion.

With the further improvement of industrial concentration, there will only be 5-10 large-scale enterprises in the domestic LED chip market in the future. At present, the top five chip enterprises in the industry account for 65% of the revenue; this is especially true for packaging enterprises, and the number of packaging enterprises From more than 1,500 in 2014 to only more than 1,000 in 2016, the concentration will continue to increase in the future. The concentration of the LED industry chain continues to increase, the industrial chain structure continues to solidify, and the bargaining power of industry leaders will steadily increase. Hongli Zhihui will further deepen the field of display packaging by virtue of its cost-effective products, and recently launched the employee stock ownership plan and the chairman's shareholding increase plan, demonstrating the firm confidence of the management to become bigger and stronger.

Leading listed companies in the LED midstream packaging segment: Mulinsen, NationStar Optoelectronics, Hongli Zhihui, etc.; Mulinsen Packaging capital is expanding continuously, with a capital increase of 500 million Australian dollars, 5.5 billion investment in LED display projects, and simultaneous capital increase or acquisition of a number of display companies. After the expansion of the packaging plan, the production capacity can exceed 35,000KK/month; National Star Optoelectronics has expanded production three times within 12 months, and the small-pitch production capacity has exceeded 800kK/month, and signed a white light patent licensing agreement with GE in the United States, laying a solid foundation for further expanding overseas sales Fundamentals: We have been tracking the LED industry chain continuously, LED chip leaders Sanan, Aoyang and many other LED chip companies have been in full production since the second half of 2016. Epistar, Taiwan's leading chip company, said that due to the sharp increase in downstream demand for quaternary LEDs, LED backlights, security monitoring, smartphone flashlights, and automotive products, production has been at full capacity since the end of the second quarter of last year. Therefore, this Sanan price increase is reasonable, and it is verified that the overall supply and demand pattern of the LED industry is continuously improving.

As a leading LED chip company, Sanan Optoelectronics has increased its prices, verifying that the overall supply and demand pattern of the LED industry has undergone a fundamental change. Not only is the supply side shrinking due to the elimination of outdated production capacity, but also the downstream demand side of LED has grown steadily, and profitability has steadily improved. We reiterate our strong concern It is suggested that the LED industry has great opportunities. We see that the LED upstream chip end has been reshuffled for 15 years, and the production capacity of backward chips has been gradually eliminated. Taiwan's leading Epistar and CREE have shut down 25% of their production capacity, Samsung and LG have also shut down part of their production capacity, and domestic government subsidies have begun to increase significantly in 2016 shrinking, and the expansion of new domestic supply dropped sharply. At the same time, the downstream domestic ban on white order will increase the demand for LED display by another 60%, and the compound annual growth rate of small-pitch LED screen will be 28%.

Therefore, we can observe that the price of some chip products has increased by 5-10% since 2016; the price of some packaging products has increased by more than 15%. improve. Since 2016, the prices of LED chips and packages have risen one after another, marking the end of the reshuffle of the overall LED industry chain, and the industry has entered an era of stable income from an era of excessive competition. .

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