In the morning of July 17, Ganzhao Optoelectronics announced that the company would continue to expand the production scale of LED epitaxial chips on the basis of the original production of LED epitaxial chips, and planned to invest 5 billion yuan (in two phases) in the newly-built area of Nanchang City, Jiangxi Province, to build the production base of Ganzhao Optoelectronics Nanchang blue-green chips.

LED in previous years lighting The industry expanded crazily, market demand was oversaturated, serious overcapacity led to price war and industry reshuffle, and many LED companies lost money in 2015. As the LED market warms up, the price of LED epitaxial chips tends to stabilize. Now the tide of production expansion is rising again, can we get rid of the hidden worry of overcapacity this time?

Several photoelectric enterprises expand production scale

In the morning of July 17, Ganzhao Optoelectronics announced that it planned to invest in the construction of Ganzhao Optoelectronics Nanchang Blue Green Chip Production Base in the new district of Nanchang City, with a total investment of 5 billion yuan (invested in two phases). After being put into operation, it will build a blue green chip production base that can achieve a monthly output of 1.2 million pieces (equivalent to 2 inch pieces). It is estimated that the investment in the first phase will be 2.5 billion yuan, and the monthly production of 600000 pieces (2 inch pieces) can be achieved. In addition, based on the actual demand of blue-green light business expansion, it is proposed to set up a wholly-owned subsidiary with its own capital of 300 million yuan to implement and promote the expansion project.

Qianzhao Optoelectronics announced on the same day that, in order to better take advantage of the capital market advantage to promote the company's strategic layout in the semiconductor field and promote the company's long-term development, it plans to invest in the establishment of an industrial fund with a total size of no more than 700 million yuan, focusing on investment in the semiconductor field, including but not limited to microwave devices, radio frequency devices laser New direction of LED, etc. Among them, Ganzhao Optoelectronics plans to use its own funds to subscribe fund shares of no more than 100 million yuan, which is inferior funds.

In fact, the reporter of the Daily Economic News noticed that many LED listed companies are busy with layout and expansion with the recovery of the LED epitaxial chip market.

In addition to Ganzhao Optoelectronics, on June 30, Zhaochi announced that it would invest no less than 1.5 billion yuan and no more than 1.6 billion yuan to build LED epitaxial chips and chip production projects in Nanchang High tech Industrial Development Zone.

In addition, the LED epitaxy, chip and sapphire processing project of Huacan Optoelectronics in Yiwu Plant was officially put into production on July 15. It is understood that the Yiwu plant area plans to invest a total of 6 billion yuan, with a land area of more than 280 mu, and will increase the production capacity of 250000 pieces of 4-inch LED epitaxial chips per month after the full capacity is reached. The current Phase I project, with an investment of 3 billion yuan and an area of 140 mu, will be formed by the end of the year LED chip 150000 pieces/month and 200000 pieces/month of sapphire substrate.

Industry: Epitaxial chips are saturated as a whole

From 2010 to 2015, numerous LED manufacturers expanded on a large scale, and the market competition was extremely fierce, which led to overcapacity in the industry, continued to decline in prices, many enterprises faced losses, and the profits of global chip manufacturers also declined significantly. After realizing the blind construction, some small and medium-sized enterprises chose to shut down, and some large enterprises chose to reduce production and increase prices.

In the second half of 2016, the LED market gradually recovered. The performance of many listed companies in 2016 has improved significantly compared with that in 2015. According to the 2016 annual report of Ganzhao Optoelectronics, the LED industry market recovered in 2016, and the market demand and price of chip products showed a good development trend. Due to the favorable changes in market conditions, the company's revenue in 2016 grew rapidly compared with the same period last year.

Now the tide of production expansion is rising again, can we get rid of the hidden worry of overcapacity this time?

In the announcement, Ganzhao Optoelectronics said that continuing to invest in the Nanchang project on the basis of the existing capacity would significantly increase the company's overall capacity, and the company was faced with the risk that current customers could not fully digest the new capacity. However, with the continuous growth of downstream applications of LED chips and the increasing demand for chips, the company needs to actively explore new customers to prevent the risk of unsalable products.

In addition, Ganzhao Optoelectronics said that the current LED epitaxy Chip industry Although the decline of product prices has stabilized, it may be impossible to completely avoid the re emergence of irrational competition in market prices. Therefore, the project will also face the risk of declining profitability caused by the continuous decline of product prices.

Guo Xiu, secretary-general of Guangdong Lighting Appliance Association, told the Daily Economic News that with the maturity of technology, the quantity of LED products has stabilized and the price has fallen. At present, the overall recovery of LED is only in the application field, and the demand for some product varieties is growing, but it will not affect the upstream epitaxial chip on a large scale. Epitaxial chips have been saturated as a whole in the past two years.

Guo Xiu told reporters that from the perspective of the global epitaxial chip industry, it is unrealistic to set off another big boom, because China has already laid out a lot of upstream LED in the early two years. Unless there is a core breakthrough in a new specific field, such as materials, or new equipment or technology, it is possible to invest in such equipment, which is revolutionary. "If there is no revolutionary technology, there is no need to invest so much."