LED application policy multiplied by the wind

The central government has promoted the reform of “new urbanization”. Therefore, LED lighting with energy saving and environmental protection has been favored. Commercial and public lighting demonstration projects launched by local governments have recently come one after another.

According to media reports on the 14th, a few days ago, the General Office of the Fujian Provincial Government forwarded a notice from the Fujian Provincial Bureau of Information Technology on "Some Measures for the Promotion and Application of LED Lighting Products in Fujian Province", stating that by the end of 2015, the general use of LED in the public lighting field will be basically achieved. Lighting products, the province to achieve more than 50% year-on-year lighting energy saving, reduce carbon dioxide emissions by 400,000 tons per year, led the province's LED industry, the new output value of 500 billion yuan more than that year.

Industry support policy frequently supports LED industry

Due to its high electro-optical conversion rate, LED meets the current requirements for energy conservation and emission reduction. Therefore, in recent years, from the central government to local governments, and from abroad, LED industry support for LED manufacturing and LED promotion has been continuously introduced, effectively promoting LED The formation of the industry chain and the development of mature and accelerated the promotion of the application of LED products.

Due to energy conservation and emission reduction considerations, various countries have established incandescent lamp elimination roadmaps and gradually prohibit the production and sale of incandescent lamps. The EU has phased out incandescent lamps and traditional halogen lamps since 2009 and has completely banned the sale of these two traditional lighting fixtures since September 2012. The United States also stipulates the elimination of 100W incandescent lamps in January 2012, the elimination of 75W incandescent lamps in January 2013, and the elimination of all incandescent lamps by 2014. China has also established a plan to phase out incandescent lamps for general lighting: Since October 2012, imports and sales of incandescent lamps of 100W and above have been banned. Since October 2014, imports and sales of incandescent lamps of 60W and above have been banned. From October 2015 to 2016 In September of the year, the pre-phase policy was evaluated and the follow-up policy was adjusted. From October 2016, incandescent lamps of 15W and above were banned from being imported and sold. As LED lamps have more energy-saving and non-polluting advantages over fluorescent lamps, we believe that the global phase-out of incandescent lamps will open up broad space for LED lighting.

Relatively over-investment in the industry, LED companies have fallen into a temporary dilemma

Before 2011, local governments implemented preferential policies for attracting investment and encouraged companies to invest in the LED industry locally. The situation that the downstream lighting demand did not start as scheduled has caused the relative overcapacity of the LED industry over the past two years. According to the statistics released by the GLII, in 2012, the MOCVD inventory in the Chinese LED industry increased from 803 units in 2011 to 917 units, an increase of 114 units. The number of MOCVD is nearly three times that of 2010, and the total production capacity has exceeded 10 times in 2010. In 2012, the MOCVD capacity utilization rate in China was only about 30%, and the operating rate was only 50%. The pace of investment is faster than the large-scale demand start-up, resulting in sharp declines in prices from the upstream chip, mid-stream packaging, and downstream application products. The competitive environment of enterprises is poor. However, we believe that the dilemma of LED companies is temporary and will be resolved with the large-scale lighting market.

Lighting demand warming business is expected to record high revenue
Taiwan's LED chip and packaging maker's April revenue data shows industry demand is heating up. Taiwan’s LED chip leader Crystal’s monthly revenue in April was 1.92 billion yuan, an increase of 12.0% from the previous quarter and an increase of 4.9% year-on-year. A new record high. Jingdian is optimistic about the market outlook, the current blue LED application rate has reached more than 90%, part of the lighting orders have seen the third quarter. Taiwan’s LED packaging giant Everlight achieved consolidated revenue of 1.93 billion yuan in April, a record high, 4.5% month-on-month, and 33.6% year-on-year, and said that capacity utilization remained at over 80% in May and June, and Q2 battalion Receive new heights in sight.

Industry demand exceeds expectations to improve price wars

With the increasing demand for TV backlight and lighting, the LED industry Q2 and Q3 will gradually enter the peak season. From the monthly operating data of Taiwan’s chip and packaging companies and our research on the domestic LED industry chain, the downstream lighting demand has exceeded expectations. improve. The contributing factor to the improvement in demand exceeding expectations is the continued decline in the prices of LED products and the deep implementation of the overseas incandescent lamp elimination plan.

For the LED industry: First, the upstream chip makers with the highest performance elasticity after the downstream demand – Huacan Optoelectronics, Sanan Optoelectronics; followed by the manufacturers who have mastered the sales channels and have the brand advantage – BDO Runda, Sunshine Lighting, Hong Li Optoelectronics has benefited from the rapid growth of the smart terminal market and its competitive landscape, and it is the LED display backlighting manufacturers with the strongest certainty in performance – such as Jufei Optoelectronics, Ruifeng Optoelectronics and other large listed companies.