Domestic LED chip profits continue to decline

Overcapacity leads to thinning of LED chip profits. Recently, various manufacturers have successively issued the 2012 annual report. The annual report shows that the era of high-margin LED chips has passed. Domestic LED chips have excess capacity and profits continue to decline. According to the annual report of industry leading enterprise Sanan Optoelectronics, the operating revenue in 2012 was 3.363 billion yuan, an increase of 92.48% year-on-year; however, the net profit attributable to the shareholders of the listed company was 810 million yuan, a year-on-year decrease of 13.47%. It is worth noting that operating income rose sharply, but profits fell. In its annual report, the reporter found that the gross profit rate of the entire industry decreased by 14.36 percentage points year-on-year to 25.31%. In addition to Sanan Optoelectronics, other chip companies such as BDO Runda, Silan Micro, and Guoxing Optoelectronics all saw their 2012 profits decline.

It is reported that with the application of LED technology in the field of lighting, the entire industry entered a period of rapid development in 2009 and was considered as a sunrise industry. At that time, the industry expects that by 2015, LED lighting will occupy 30% of the general lighting market, LED lighting industry. The scale will reach 500 billion yuan, and the export will reach 30 billion U.S. dollars. LED lighting cakes are tempting and the market prospects are good, bringing in all kinds of capital.

However, with all the capital's one after another shot, the LED industry clearly began to oversupply. Yesterday, a representative of a company that did not wish to be named pointed out that the current inventory is high, and the average chip company can use six months of inventory. According to Qi Faxin, a senior analyst and LED project manager at SEMI China, in fact, the LED market demand did not decrease in 2012, but the capacity expansion far exceeded the demand. Moreover, in the field of high-end lighting, domestic manufacturers do not have too much market share, and they can only fight price wars in the low-end market, causing structural overcapacity.

Appliance analyst Liang Zhenpeng said that the stagnation of LED TV sales is also the reason for reduced demand for chips. The LED chip is the main component of the LED TV, but in 2012, the color TV market is very sluggish, and it cannot pull upstream production and sales scale.

It is worth noting that although production and sales are slow, there are still companies that are expanding. The layout of the Chongqing LED chip project of Shanghai Supersilicon Semiconductor Co., Ltd. was completed and put into production at the end of January this year; the chip chip company of Taiwan, Jingyuan Optoelectronics, is expanding production; The joint venture Changzhou Changzhou Plant also increased the production of 8 LED chip production equipment.

The industry generally believes that the oversupply of LED chips, the profits certainly can not be quickly improved, and continuous expansion will only lead to further lower profits.