New technology and new demand dual drive LED industry once again attracted industry attention

The overall market demand growth slowed down, new capacity was quickly released, and inventory was cleared... Many factors have led to a decline in the performance of many LED industry chain companies in 2018. What is the trend of the LED industry in 2019? Where are the investment opportunities in the industry chain?

新技术与新需求双驱动 LED产业再次引起业界关注

In the short-term, the LED industry is expected to usher in a bottoming out as the industry ushers in the high-end demand for inventory inflection points and automobiles. In the medium and long term, the small-pitch market will continue to maintain high growth, and the Mini-LED will mature. Micro- LED has already ushered in the dawn of industrialization, and new technologies will bring a new round of high growth to the LED industry.

The industry is expected to usher in a bottoming out

With the end of the 2018 annual report, the performance of LED companies such as Huacan Optoelectronics, Lehman Optoelectronics and Changfang Group has fallen sharply. The LED industry, which is in the doldrums, has once again attracted the attention of the industry.

In 2018, among the 69 LED concept stocks, only 32 were profitable, accounting for less than 50%. Taking Huacan Optoelectronics as an example, the company achieved operating income of 2.732 billion yuan in 2018, a year-on-year increase of 3.87%; net profit attributable to shareholders of listed companies was 244 million yuan, down 51.43% year-on-year.

What is the reason for the LED industry to fall into a downturn again? Some insiders said in an interview that the most direct reason is that in 2016, with the continuous growth of market demand, in 2017, the domestic LED industry chain has entered a new capacity expansion period; Released, the industrial chain entered a new round of surplus in 2018.

“The overall market demand growth slowed down, small and medium chip manufacturers' capacity was released quickly, and inventory was cleared...” Hua Can Optoelectronics explained this in the 2018 annual report for the reason of the decline in performance. According to the reporter's review, in addition to Huacan Optoelectronics, a number of LED chip epitaxial wafer companies such as Ganzhao Optoelectronics, Aoyang Shunchang and Zhaochi Co., Ltd. announced expansion in 2017. According to statistics from LEDInside, the company's new LED chip production equipment, MOCVD (metal organic compound chemical vapor deposition), was about 401 units in 2017, which is the peak of expansion since 2011.

Will the LED industry still be overcast in 2019? “As the destocking inflection point falls, and the demand for high-end markets such as automobiles grows, the LED industry is expected to usher in a bottoming out.” The above-mentioned industry believes that although the LED industry will not have much growth in 2019, its structure will be Sexual opportunities are worthy of attention.

'We expect that with the further consolidation of the industry, the inventory will be cleared, and the industry will see a balance between supply and demand in the second half of the year.' Wang Jiangbo, vice president of Huacan Optoelectronics, gave an optimistic expectation when interviewed by reporters.

In the view of the LED Research Center of Jibang Consulting, the deep reason for the downturn in the LED industry is that the replacement cycle of LED lighting is coming to an end, and the demand of the entire market is switched to the innovation drive. LED companies can no longer compete on price and scale as before. Under the new competitive landscape, leading companies will accelerate the launch of innovative applications and seize more market share.

Wang Jiangbo introduced that in 2019, Huacan Optoelectronics will increase the R&D of new technologies and new products, increase the shipment of high-efficiency, backlight and small-pitch products, and reduce the proportion of low-end lighting products; The company is actively exploring new application markets, including the acquisition of overseas orders and the expansion of overseas customers by means of the accumulation of US Semiconductor's overseas and cooperation with European and American companies.

'Our other advantage is that the semiconductor (MEMS sensor) business has entered a rapid growth period.' Wang Jiangbo told reporters. It is reported that the geomagnetic sensor and accelerometer of Meixin Semiconductor have been verified by customers in many well-known mobile phone manufacturers and automobile manufacturers, and it is expected to achieve sales volume in 2019.

New technology dominates the next round of high growth

Sanan Optoelectronics announced on April 26 that it plans to invest 12 billion yuan to build a Mini/MicroLED epitaxial and chip product project in Hubei Province.

Why should Sanan Optoelectronics invest heavily in Mini/MicroLED? An LED veteran told reporters that the LED industry is only low-end lighting capacity, and Mini/MicroLED is regarded as the next-generation technology in the industry, which will bring a new round of high growth to the industry.

MiniLED is regarded as the key to the survival of the panel factory and the LED factory. The LED Research Center of Jibang Consulting released a report that special applications such as small-pitch LED display, MiniLED backlight, automotive lighting, and high-efficiency LED lighting are expected to drive demand in 2019.

The data shows that the development trend of LED emerging display technology is that the display screen is miniaturized, and it is currently undergoing the evolution path of small pitch, MiniLED and MicroLED. As far as MiniLED is concerned, it is currently mainly used in television, mobile phones, car display, digital display and other fields. MicroLED is a further development of MiniLED. The LED Research Center of Jibang Consulting believes that the biggest application of MicroLED in the future is large-size display.

'Small spacing will continue to maintain high growth this year.' Wang Jiangbo introduced that the small spacing of Huacan Optoelectronics is now mainly aimed at chip products of p1.5 and below. The main application areas are security monitoring, large-size TV and so on. According to the reporter, the growth of small-pitch LED displays has been reflected in the performance of some listed companies. For example, Liard’s net profit growth in the first quarter of 2018 and 2019 was 4.53% and 12.13%, respectively. Liard believes that in 2019, small spacing will continue to drive smart display to grow steadily.

'MiniLED will achieve heavy volume this year, but the MicroLED industry chain may take three to four years to mature.' For the technical node, Wang Jiangbo's judgment has its own practical support. He introduced that Huacan Optoelectronics' MiniLED chip has been verified by many well-known end customers in 2018, and has already achieved mass shipment. The next step will be to focus on improving product performance, reliability and yield optimization, and further reducing costs. . “Huacan has also achieved great breakthroughs on MicroLED. MicroLED epitaxial wavelength uniformity and surface defect density have been continuously optimized, and forward-looking research and development of ultra-large size (6-inch, 8-inch) epitaxial technology has been carried out.”

The world's major LED chip companies and panel makers are all betting on MicroLED. For example, Apple acquired MicroVue Technology's LuxVue in 2014 to develop better screen display technology. Semiconductors and panel makers such as Sony, LG, Jingdian, AUO and Innolux are also actively investing in research and development.

“Huacan Optoelectronics adheres to the dual main industry development strategy of LED+ sensors.” Wang Jiangbo stressed that in the next three years, in addition to continuously increasing the revenue of sensor business, Huacan Optoelectronics will continue to expand LED epitaxy and chips in the LED field. The main business extends to the field of compound semiconductors such as VCSEL (Vertical Cavity Surface Emitting Laser), and continues to promote the research and development and industrialization of MicroLED, and is committed to further increase in the proportion of high-end products and the proportion of quality customers.

Source: Stock City Network