Since the beginning of this year, people in the industry have been paying more or less attention to the fact that the LED chips industry's major chips and packaging giants are making great progress and expanding their production frequently...
Sanan Optoelectronics announced that the company decided that the wholly-owned subsidiary Xiamen Sanan Optoelectronics Technology Co., Ltd. will not invest more than 280 million yuan to add 20 international single-cavity machines or five four-cavity machine-connected gallium nitride MOCVD. Equipment and expansion of some LED chip production lines.
Guoxing Optoelectronics said that it will continue to expand the production scale of the midstream packaging sector, and plans to expand its production with its own funds of no more than 400 million yuan to continuously improve the company's production capacity and seize a larger market share.
Mulinsen's construction of the first phase of the plant in Jiangxi Xinyu has been completed, and some of it has been put into use. The first phase of the plant in Jiangxi Ji'an is under construction. It is understood that in 2016, Mulinsen will accelerate the construction of two production bases in Xinyu and Ji'an, Jiangxi, and increase the market share of products.
According to industry organizations' forecast data, China's LED industry is expected to have a total scale of 396.7 billion yuan in 2015, a year-on-year increase of 15.1%, of which LED chip production value reached 13 billion yuan, an increase of 8% compared with last year, but LED chip production has increased significantly by 60%. %. In addition, China's LED packaging industry currently has a considerable economic scale, accounting for about 70% of the global LED packaging production, and this proportion will be further enhanced in the future.
The manufacturers in the upper and middle reaches have expanded their production, and the normal situation will cause the price of the product to drop. However, the current situation is not the case. Recently, LED display companies have fallen into a state of contradiction: raw materials are not falling but rising prices! What is this all about?
The rising cost forces the packaging manufacturers to raise prices
With the development of small spacing, some people in the industry said that the current LED display market is in a state of "seeking more than supply." Due to the tighter indoor and outdoor spacing, the market demand for lamp beads is increasing, which has prompted the upstream and midstream manufacturers to increase production scale.
It is understood that with the decline in the price of some finished products, many downstream LED display manufacturers have increased their capacity to ease the pressure of price competition. However, the demand from downstream manufacturers has increased, which has also prompted the expansion of raw material manufacturers in the upper and middle reaches. Production scale, and meet the needs of the downstream market.
However, in recent years, the economy has been declining, and the pressure on the survival of enterprises has increased. As some costs have risen, the cost of raw materials in the upstream of LED displays has risen.
As is known to all, in the production process of LED packaging devices, the proportion of raw materials in production costs is as high as 75-80%, so in the case of rising raw material costs, it will inevitably bring certain production pressure to packaging manufacturers. It is understood that the current LED package unit number is about 15-18 yuan with gold wire, while the relatively cheap copper wire is 8-1.5 dollars.
At the same time, some insiders revealed that for high-end packaging devices, packaging manufacturers are more willing to purchase international brand of auxiliary products. Undoubtedly, the price of international brand accessories is relatively high. In such a case, packaging It is not difficult to understand that the manufacturer has made some adjustments to the price.
In addition, the cost of manpower is also a problem that LED companies have to face. According to the information released by the relevant agencies, from the perspective of labor costs in the industry, the labor costs of 15 industries such as manufacturing, construction, wholesale and retail have increased compared with the previous year. In particular, the average labor cost of manufacturing has reached nearly 120,000. The annual average reached 119,788 yuan, an increase of 11.5% over last year.
In summary, as the cost of labor, rent, and raw materials of the enterprise continues to increase, it will bring challenges to the operation of LED enterprises, and it will force the enterprise to survive or profit. The means of price increase is only one of them.
Low price competition bottoms out and high quality drives prices up
In recent years, with the increasing number of LED products, homogenization has caused a rapid decline in prices. Even if the company's production capacity and sales scale have increased compared with the same period of last year, the market competition has intensified, resulting in a sharp drop in product prices and narrowing of gross profit margin. According to industry insiders, in terms of price, LED chips, packaging and other raw materials have been seen. bottom. Or in other words, competition around low prices is not enough to support the long-term development of enterprises.
"The market price of LED packaging has been 'waist' twice in the past two years." Mulin Forest Jiliang said frankly that even in the packaging industry, the absolute cost advantage and scale advantage of the packaging industry, the competition of LED midstream and downstream packaging products in the past two years is very fierce, the industry as a whole Prices have been falling all the way, and the price in 2014 was half of that in 2013, and 2015 was down 50% from the previous year.
The abundant production capacity highlights the excessive supply of industry fatigue, and the lack of supply of high-end products in the industrial chain has brought about structural concerns. Nowadays, consumers are turning to "high-efficiency" from LED "high-efficiency", which puts more requirements on packaging, with superior performance, higher luminous efficiency, lower cost, higher index, and constant test. The company's R&D and innovation capabilities. To this end, LED packaging companies began to break through the constraints of production factors for structural adjustment, and drive to seize the advantages of the industrial chain space. However, we need to realize that when developing high-performance LED package products, companies need to invest more money, and prices will inevitably rise.
The market pattern tends to stabilize enterprises intend to control bargaining power?
In the past two years, when the global macro economy has weakened and the demand for LED display screens has been sluggish, the production capacity of mainland enterprises such as Sanan Optoelectronics, Huacan Optoelectronics, Ganzhao Optoelectronics, and Aoyang Shunchang has expanded against the trend, further exacerbating LED chips. In the market competition, the price war of chip manufacturers will intensify. At the same time, it also prompted the packaging industry to enter an accelerated integration state. Today, the LED packaging market is further concentrated to leading enterprises, and the industry concentration is high.
As the overall LED packaging market tends to be stable, the pricing power of products gradually returns to the hands of leading enterprises. Under such circumstances, it is not known that enterprises want to control the bargaining power of products.
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