China's local LED epitaxial plant "painful" rather than "heart"

Many of the industry’s peers complained that the LED factories in mainland China did not have access to LED core technologies. In fact, the core technologies complained of are more often reflected in the upstream of LEDs, including MOCVD machines and epitaxial wafer fabs. However, on a global scale, the lack of mastery of the core technology is just a Chinese manufacturer, especially in the field of MOCVD machines.

The field of MOCVD machines is not a comparison. Even on a global scale, Aixtron and Veeco are overlords. At the epitaxial wafer end, China is also facing severe pain. The breakdown of China's domestic LED epitaxial wafer fabs includes only Xiamen Sanan, Wuhan Huacan, Hangzhou Shilan Mingxin, Zhuhai Dehao Runda, Shanghai Blu-ray and Shanghai Lanbao. However, compared with wafer fabs in other regions, it also appears to be "difficult".

LED lighting market can not reach the standard, people like to spread their grievances in the LED upstream of the so-called core technology, but it should be understood that the cost of light sources now also accounted for a few percent of the cost of lighting?

It is undeniable that China’s wafer fabs really did not give power. China’s first wafer fab San’an Optronics set a record high last year’s inventory level, but this inventory may not be as big as this large company with a market value of 20 billion, but how much Still got the support of the government.

LEDinside believes that the receipt of government gifts from upstream fabs is reflected in two points:

First, take the money to the palm of your hand. The performance of many wafer companies is flat, mainly relying on direct government subsidies to achieve profits. For hard-working competitors, I'm afraid it's like swallowing flies and vomiting but it's embarrassing to say.

Second, benefit from the LED downstream lighting, government procurement, and performance growth. This makes people more acceptable, at least pulling the industry's growth. However, people in the industry expressed concern that the government's long-term blood transfusions to the companies are uncertain as to whether or not the companies really have the ability to survive.

Currently, the main problems facing fabs in mainland China are the following two points:

First, subject to the market's deserted, capacity expansion was conservative, but its capacity was not expanded, but it was quickly squeezed by peers. Hangzhou Shilan Mingxin is a typical representative. Shilan Mingxin took up a relatively large market share. Nowadays, the company is relatively conservative in terms of capacity expansion, and its production capacity cannot keep pace with the market development efforts. Therefore, there has been a general performance phenomenon.

Second, the lack of products with distinctive features and obvious advantages. Compared with Taiwan, South Korea, Japan, and other regions, China's level in the chip field is at a disadvantage, and Sanan is doing relatively well. In the face of the fact that Sanan is the only major company to take a large market and win with the advantages of price and technology, other chip factories in mainland China can only express their lament.

LEDinside believes that the overall backwardness of China's LED is not entirely due to the relatively late start. It is not difficult to find that many companies in mainland China have very strong reliance on their thinking, so that the level of research and development is rather weak. The international giants seem to be taking a look at this kind of inertial thinking of Chinese companies, simply opening up the Chinese market in large areas on the upstream side of LED.

However, until now, the profit margin of LED upstream has become narrow, and China's LED application market has a huge capacity, which has attracted many international manufacturers to seize the Chinese LED downstream market. It is worth noting that international companies are blocked by patents and it is obviously difficult for Chinese LED companies to let go of their hands.