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China LED Chip Industry Has Serious Overcapacity
According to global market research firm, TrendForce's Green Energy Division LEDinside survey from last August, the two sides have occurred at least five cases from the LED chip industry consolidation, including through the equity transfer Epistar Canton Ga acquire the remaining 49% equity interest in three An optical subscription Formosa Epitaxy photoelectric 120,000,000 ordinary shares.  LEDinside said that in 2010 China's LED chip industry began to make aggressive investments lead to serious excess capacity chip, product prices continue to fall, most of the companies have been struggling. Climate warming, LED upstream chip industry overcapacity still not alleviate the short term, so is the inevitable result of industry consolidation. In 2009 Yangzhou municipal government launched the MOCVD cash subsidies, on a one-time purchase of a new LED wafer production MOCVD equipment more than five new or expansion of investment projects to give financial subsidies, followed by Jiangmen, Wuhu, Hangzhou, Wuhan and other local governments have introduced a similar policy.  According to LEDinside statistics, as of the end of 2012 China MOCVD equipment has more than 900, but in 2012 China MOCVD capacity utilization is not Daowu Cheng. MOCVD subsidies directly led to the new LED epitaxial wafer project like popping up. According to statistics, 2009 to 2012, China set up a new domestic total of LED epitaxial wafer project totaled 65, but due to poor market conditions, more than three out of or into the project has now been shelved. Excess capacity led to an increasingly competitive market, furthermore some chip companies rely on government subsidies to low-cost strategy to capture the market, a direct result of the Red Sea chip market. LEDinside survey found that in 2012 the domestic LED display chip prices fell the most serious, some low-end product prices fell up to 55%.  For example, to monitor chip as the main business of Hangzhou Silan Azure optoelectronics, 2012 gross profit margin of only 5.7%. LEDinside said that in 2012 China's domestic enterprises in the loss of most LED chip edge, some companies no funding support has fallen, China LED chip industry from the early technological competition into capital competition. LEDinside noted that although the investment boom led to overcapacity problems have been alleviated in the short term is unlikely, but the decline narrowed from the wafer price trend, the upstream part of the business has been run out of bottom pressure in the capital, after the first few years of the overdraft , obtain new financing possibilities have also been minimized. Other industrial warming signal is also relatively abundant capital prompted some vendors have the courage to be a gamble, horizontal merger through acquisition of equity needed to compete for future scale advantages. LEDinside expected in the next year, China LED chip industry consolidation will be large-scale influx accelerated.
    
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