Under the chaos of industries such as oversupply, "underutilization" and "incremental increase", a new round of market changes is being fostered.
Domestic companies hope to use the time of 1~2 years to increase the luminous efficiency of current LED chips by 30%~50% and the brightness of LEDs to above 200lm.
Domestic LED chip penetration rate increased
In the market, domestic chip manufacturers have stepped up the acceptance of domestic chips by the packaging factory with high cost performance.
Since 2009, China's LED epitaxial chip industry has developed rapidly due to strong domestic government policy support and huge display, backlight and lighting markets. The number of MOCVD machines for major production equipment has grown rapidly, from 130 units in 2009 to 917 units at the end of 2012.
In 2013, due to the rapid development of the lighting market, the production capacity of the LED industry in the upper, middle and lower reaches of the LED industry has slowed down the overcapacity phenomenon in the second half of 2011 to a certain extent, and the industry has begun to pick up. The capacity utilization rate of the upstream epitaxial chip field has also increased from less than 30% in 2012 to the current average of nearly 60%. In the market, as the backlight market gradually becomes saturated in the next few years, demand will show steady growth, and the next market growth point will come from the lighting market. Since 2011, the domestic lighting market has begun to gradually increase, and by 2013, the lighting market demand has begun to increase significantly. It is expected that in the next few years, the lighting market will become the market segment where upstream epitaxial chip manufacturers benefit the most.
In the long-term environment of the lighting market, domestic chip manufacturers have also increased the level of chip manufacturing technology by continuously introducing technology, talents and increasing R&D investment, and stepped up the packaging factory in the market with high cost performance. The acceptance of domestic chips has drawn more and more market share. For example, in the field of indoor lighting and commercial lighting, the replacement speed of domestic chips is very fast. Recently, the person in charge of the domestic packaging company said: "In the past two years, many large companies have not specified which chip to use. As long as the chip quality is good, it is acceptable. I remember that 80% of the chips were purchased from Taiwan and China three or four years ago. Or the foreign brand, now sourcing chips, 90% have begun to purchase mainland China chips." There have even been cases where customers have taken the initiative to use a certain brand of chips in mainland China.
The strange phenomenon of "incremental increase does not increase"
This year's equipment market demand growth was stable, but due to continued price declines, the overall sales of equipment did not increase significantly.
Benefiting from the overall recovery of the global economy and the driving of the terminal lighting market, the overall operating conditions of the domestic LED industry changed significantly in the first three quarters of 2013 compared with the same period last year. However, due to the impact of the downward trend in the downstream market price and the intensified competition in the industry, upstream chip manufacturers have fallen into a dilemma of falling gross profit margins – “increasing revenues without increasing profitsâ€. Analysis of the reasons, the upstream chip price "falling down" is mainly due to the rapid expansion of production capacity caused by excessive investment in the past few years, and the market can not be completely digested. The high inventory caused by oversupply is the root cause of the sharp price drop of the chip. In view of market price pressures, manufacturers have to sell chips that were previously produced at high cost at a lower price, which affects the gross profit margin of enterprises, and ultimately leads to “increasing revenue without increasing profitsâ€. Not only the upstream chip segment, but also meager profits or even unprofitable phenomena are spreading in downstream lighting and the upstream equipment industry. Taking North Microelectronics as an example, although the overall demand for equipment in the market has grown steadily, the company's equipment sales have grown rapidly, but due to the continued decline in prices, the overall sales of equipment has been comparable to the same period last year.
Under the chaos of “excessive supplyâ€, “underutilization†and “incremental increaseâ€, a new round of market changes is being fostered. Since the beginning of this year, there have been frequent incidents of expansion, mergers and acquisitions and even closures in the industry. The upstream chip industry has begun to show signs of consolidation. In the future, China’s LED situation will be changed from “ten countries†to “three countriesâ€. As a result of industrial integration, industry resources are increasingly concentrated in advantageous enterprises. In the field of LED upstream epitaxial chips, the market structure led by several leading companies will be formed in the future. The current product homogeneity is serious, but in the long run, it is only a short-term behavior for companies to obtain the market with “price warâ€. The recent phenomenon of frequent mergers and acquisitions among enterprises is also a necessary process for industrial development to a certain stage, that is, the elimination of backward production capacity, backward technology and backward management.
After the integration period is a three-dimensional competition
Future customer needs will no longer be the original, single, but will evolve into multidimensional, three-dimensional needs.
Judging from the third quarterly report of the 2013 LED upstream listed companies recently released by major media, the situation of mainstream chip manufacturers has been greatly improved compared with the same period of last year. The decline in chip prices has also narrowed, and some corporate chip prices can still reach The quarter is flat. The head of a well-known domestic chip company believes that the price of the chip will neither rise nor fall too much. The chip industry is about to enter an era of product performance competition.
Entrepreneurs in the industry have no shortage of "technical warfare" after the "price war". They believe that the current LED chips are far from the theoretical luminous effect. Many companies in China, including foreign companies, are doing some deeper technical research and development. Domestic companies hope to use the time of 1~2 years to increase the luminous efficiency of current LED chips by 30%~50% and the brightness of LEDs to above 200lm. They also believe that technological warfare is the time to really fight for the strength of the enterprise, because research and development requires a lot of investment. At this stage, if many companies fail to keep up, they can only hope to stimulate the demand by generating other alternative products downstream.
In fact, after several years of ups and downs in the market, companies that have finally settled down in the industrial chain will become more mature and rational. This attitude is especially valuable for the lighting market. After all, it can withstand time-tested and reliable products. In order to finally win customers. Going back to the upstream of the industry chain, although the effect of price cuts on customers is still straightforward, price cuts are no longer the only reason for downstream customers to pay. In addition to price, performance and reliability, and even the brand are important factors for customer consideration. It is not difficult to see that the future customer demand will no longer be the original flat, single, but will evolve into a multi-dimensional, three-dimensional demand. As the company itself, finding the balance between the best profit and the best service is the best way to impress customers. Perhaps we can think that the domestic LED chip market after the price war era is slowly turning around and coming on the scene.
Technical upgrades need to be laid out in advance
A generation of devices will require a generation of processes, a generation of equipment, equipment companies to bring long-term value to customers with a step-by-step process solution.
In the field of semiconductor equipment, the main reason for the relatively low domestic equipment occupancy rate is that China's chip manufacturing technology is not leading the world, so equipment selection is also based on mature foreign technology and equipment. However, for the booming Chinese LED industry, after the first stage of “disorderly competitionâ€, stepping into the integration optimization stage, there will be more resources and potential to achieve technological innovation.
In order to comply with the development of this industry, Northern Microelectronics has developed the next generation equipment in advance and cooperated with customers to verify. For example, one project currently under development is to use the advanced Sputter technology to prepare a high-quality AlN buffer layer—a layer of AlN film grown on a sapphire substrate as a buffer layer. Increasing the AlN buffer layer not only better lattice matching with sapphire, but also effectively reduces the next epitaxial growth time, reduces raw material consumption, and ultimately achieves the goal of increasing productivity and reducing cost. In addition, AlN's thermal conductivity is much better than sapphire, which can effectively improve the heat dissipation of LED chips, thereby improving the reliability of LED device performance. If the hardware design of the device is reasonable, the problem of uniformity and repeatability of AlN buffer layer deposition can be effectively solved, but to achieve the matching with the subsequent process, it is necessary to cooperate with the epitaxial chip manufacturer for process development. At present, there are several mainstream epitaxial chip manufacturers in China that actively cooperate with Northern Microelectronics to develop the supporting process of AlN buffer layer, and use this as one of the technical reserves for future differentiated competition.
The LED industry continues to move forward, and higher requirements are placed on the epitaxial chip manufacturing and packaging technologies of the upper and middle reaches. A generation of devices will require a generation of processes, a generation of equipment, equipment companies not only to meet customer needs, but also to exceed customer needs, to provide customers with more advanced technology and lower cost long-term value with a step-by-step process solution. The goal of equipment companies in the next five years should be to become the equipment and process solution provider that leads the international LED industry technology upgrade.
Related reading: Four major trends lead LED Display into "small era"
With the continuous improvement of the overall level of microelectronic assembly technology in China, the pixel center distance of high-density indoor LED display has continuously made breakthroughs, and the pixel center distance of indoor LED display has entered the era of 1.Xmm. In outdoor applications, the improvement of surface-mount LED packaging technology and the improvement of the protection level of outdoor modules broke the å…¨ of the pixel center distance of the outdoor full-color screen. The limit of the pixel center distance is constantly refreshed, and the center distance of the pixel is 5.Xmm. Outdoor full color large screens have been applied in the market. With the LED display entering the "small era", there have been some new trends in industrial development.
The picture shows the LED display project of the Lianyungang Port Group Command and Dispatch Hall built by Liard Company.
Trend a small-pitch LED display will become the mainstream of indoor and outdoor market applications
The small-pitch LED display refers to the LED display with the dot spacing below P2.5. It adopts the pixel-level point control technology to realize the state control of the brightness, color reproduction and uniformity of the pixel unit of the display screen. Since 2010, the competition for conventional LED displays has been particularly fierce, and the price war has almost invaded the basic profits of enterprises. As a result, markets in various emerging fields have developed rapidly, and markets such as outdoor media, advertising, outdoor surface mounts, and special-shaped screens have performed brilliantly. Among them, high-density small-pitch LED displays have become the most concerned products in the industry.
At present, the profit of small-pitch LED display is relatively rich, and it has great development potential in high-end fields such as monitoring, command, dispatch, and conference, and the future prospect is good.
How to reduce the current density to the second trend is the key to the success of LED display
In the field of lighting, in order to obtain high-brightness lighting products, terminal application manufacturers generally choose to use "high current density chips." However, after the LED display application enters the "small pitch era", the appropriate LED current density is exactly the opposite. This is mainly because in the application of the display, the quality of the product is not more "bright" than who's screen, but who's screen is more "dark", "dark" to not in the dark environment Eyes cause irritation.
This requirement puts higher requirements on LED devices, because when the current density is as small as 0.3~0.4 amps, how to deal with the relationship between conduction and leakage current of semiconductor devices is a difficult problem.
The application of Trend Three low-current technology puts more demanding requirements on device packaging levels
As small current chips gradually become the mainstream of the industry, solving the reverse leakage current problem will become the key to the success of display products. The maintenance of the small-pitch display is extremely difficult, which puts higher requirements on the reliability parameters such as current control and anti-static ability of the chip. The reliability of the device is closely related to the packaging technology, so this puts more stringent requirements on the packaging level of the device. At present, the demand for QFN small-pitch packaging in China's mainland market is about a few hundred kk per month, and it is likely to exceed 1000 kk in the future, but the relevant production capacity of mainland enterprises is almost zero. In the long run, QFN technology will gradually replace PLCC technology as the mainstream trend of LED packaging in the future, so packaging companies may rationally enter the field.
The real market for Trend 4 LED displays is to replace a single projection product
From the current status of industrial development, it is unrealistic to hope that LED displays (especially small-pitch displays) will enter the home market and achieve a leap-forward growth rate of more than 100 times.
Compared with the LCD screen, the absolute advantage of the LED display is its first-class energy-saving effect. However, there is no absolute advantage in LED display in terms of user experience and price.
However, compared to the single projection products currently available in the market, LED displays have great advantages in terms of color, energy consumption and clarity. Therefore, replacing a single projection product will be the key entry point for the future growth of the LED display market.
Micro perspective
@ä¸å›½å…‰å…‰ç”µå行业å会 Vice Chairman Guan Jizhen: In the LED display market application innovation, the creative market, small dot spacing product market, advertising media market has become the mainstream; in the professional service innovation, control board, professional engineering Service has become a bright spot; in the aspect of marketing model innovation, various modes such as export-oriented marketing, terminal marketing, channel marketing, and OEM marketing have emerged.
@æŽå¾· Chairman Li Jun: There are one or two thousand LED manufacturers in China, and the production capacity is seriously over-capacity. The price war will only make the gross profit rate continue to drop, killing one thousand people and losing 800. If you only do OEM, then the lifeblood will always be in the hands of others. In the long run, we must have our own brands in order to create superior benefits and sustainable development.
@æŽèŠ¯åŒ– Chairman of Silicon Core Electronics: In the indoor market, small-pitch LED display products have a large market space for the replacement of traditional TV wall and rear-projection products. As the density continues to increase, the market for LED displays is becoming wider and wider. At present, small-pitch products have shown strong competitiveness in TV stations, high-end conference rooms, high-end consumer goods, simulation and other places.
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