After nearly two years after the war price, LED industry since the second half of 2016 since the main product prices continued to rise, the industry boom continued to improve, the upstream chip and midstream packaging industry business performance improved significantly. According to Wind data statistics, there are more than 10 LED industry companies announced the 2017 interim results notice, pre-hi (including pre-increase, slightly increase, continued surplus and loss) ratio reached 100%.

The competitive landscape changes

Since 2015, the new MOCVD equipment (LED chip one of the main production equipment) subsidies to cancel the industry to enter the threshold, a large number of small and medium enterprises in the price war in succession, LED chip production capacity contraction, industry concentration gradually improved.

Data show that in 2016, the top ten LED chip manufacturers accounted for 77% of the market share, revenue scale of 10.7 billion yuan, an increase of 15%. Among them, three security, crystal power, Hua Can the top three manufacturers market share of 50%; San An in a dominance, accounting for nearly three percent of the market share.

From the 2016 new capacity situation, LED chip industry, mainly from large manufacturers of new capacity, the industry gradually to oligarchic competition. In this pattern, the leading enterprise price increases on the impact of the market plays a decisive role.

Downstream demand, small-pitch LED applications continue to expand. At the same time, benefit from the incandescent lamp completely disabled, LED has become the mainstream of general lighting light source. It is expected that with the demand for more than 20% of downstream lighting demand and the outbreak of small spacing demand, the annual demand for new LED chips increased by 10 million.

Frontier technology, the industry optimistic about Micro LED and LiFi technology and other mature after the increase, the relevant manufacturers are also actively layout this area.

From the global competitive landscape, in recent years, with the continuous reduction of costs, domestic LED products in the global competitiveness of the growing overseas customers from the Chinese market to increase the number of chip products. Guoxin Securities analysts believe that the global LED manufacturing trend to the Chinese market, domestic enterprises have a high quality of the process control and cost management capabilities.

Analysts expect that with the increase in industrial concentration, downstream demand continues to expand, industry supply and demand will continue to improve. LED chip prices will continue until the third quarter of this year, and lead the middle and lower prices.