Recently, San'an Optoelectronics and Hua Can Optoelectronics successively lowered the prices of some LED chips, announcing the period of 1.5-year LED chip price formally ended. According to the TrendForce LED research report, the supply of LED chips in short supply has been reversed and 2018 will enter the phase of supply and demand balance .
After three rounds of expansion, the three big epitaxial plants in the mainland will enter the top three positions from the two small and one small ones. The combined market share of the three major manufacturers, namely, San'an, Huacan and Australian Yangshun, has stabilized more than half, unable to renew Land-based equipment manufacturers may be marginalized.
If 2-inch epitaxial wafer production capacity to calculate, Sanan, Hua Can, Australia Yang Shunchang net increase of 1.3 million, 1 million and 830,000, respectively, the top three Chinese mainland LED chip plant, the market share of up to 32%, 20% and 12% respectively, up from 27%, 13% and 3% in 2016.
San'an market share for the first time exceeded 30%, so that the mainland's epitaxial plant from two big and small, evolved into the Three Kingdoms.
However, with the gradual opening of new production capacity by the end of this year, the supply and demand of LED chips will gradually return to balance, allowing manufacturers such as Sanan and Huacan to make strategic price adjustments in the near future for lighting and display chips.
Prior to this, the chip prices have been sustained for a year and a half are high, after this round of adjustment, LED chip prices are expected to enter a stable or slightly adjusted platform period.
Wang Fei, Principal Analyst at LEDinside, said that LED chip prices in mainland China plummeted in 2015, accelerating the shift of orders for LED chips from the world to China, causing Chinese manufacturers to increase their orders in 2016 and expand their capital expenditures accordingly. Contrast the manufacturers in other regions of the world to gradually reduce investment, and even exit the trend of LED industry, Chinese manufacturers are still the most active investment in LED industry. In 2017, the expansion of major MOCVD equipment will come from San'an, Huacan and Australian Yangshun.
Wang Fei said that after this big expansion, the three leading manufacturers will gradually exceed the production capacity of 1 million threshold per month, LED chip production capacity significantly increased concentration, is expected to form a better supply structure to avoid excessive price competition. In addition, the production capacity of new capacity is higher than that of the previous generation (K465i generation), which can reduce the production cost by about 30%, and will strengthen the cost competitiveness of the leading manufacturers such as Sanan and Huacan, Chip makers will accelerate the marginalization.