China Bonding Function Adhesive,High Level Construction Bonding,Bonding Function Sealing Shandong Tongchuang Rubber Industry Co.,Ltd. , https://www.tcadhesive.com
As TV prices have fallen, China's large number of companies producing LED chips for Samsung and Sharp are facing difficulties. Analysts pointed out that this problem of oversupply will cause half of the companies to go bankrupt, and only the larger, government-backed companies can survive.
Small companies may go bankrupt. The decline in global TV and computer sales is likely to further affect the price of LED chips. These chips will cut prices by up to 20. For China's small LED chip companies, integration or bankruptcy will be the only option.
However, analysts pointed out that Sanan Optoelectronics, which has a market value of US$2.8 billion, and Guangdong Dehao Runda will be among the few companies that can survive, because these companies have received subsidies or incentives from the Chinese government. Nomura Securities analyst Annie. Lee (AnneLee) said: This is China's strategy. They hope that the biggest companies will survive the industry restructuring.
For most of China's LED chip companies, government support is gradually withdrawing. These include tax breaks, free land use, and more than $1.6 billion in funding for LED chip production equipment. These initiatives have supported the development of China's industry in the past three years.
Shenzhen Proview, which has a trademark dispute with Apple, has also been affected by the decline in the price of LED chips and the increasingly fierce market competition. Other affected companies include Hangzhou Silan Microelectronics and Foshan Guoxing Optoelectronics. Silan Microelectronics and Guoxing Optoelectronics have all fallen more than 30% in the past year.
Industry observers pointed out that many LED chip companies have a factory operating rate of only 50. From 2009 to 2010, about half of the 700 or so production lines that were subsidized through government subsidies are currently idle. According to analysts, overcapacity in the past year has caused hundreds of small LED manufacturers in China to close down.
Bao Enzhong, deputy secretary-general of the Shenzhen LED Industry Association, said: China's financial policy has not given sufficient support to small and medium-sized enterprises. We will see more business failures.
Large enterprises receive high subsidies. Due to government support, the share of Chinese manufacturers in the global LED packaging market reached 6 in 2011, higher than that in 2010. 2. Sanan Optoelectronics said that in 2011, the company’s net profit doubled to 936 million. In RMB, the company received a government subsidy of about 1.9 billion yuan in 2011. Dehao Runda’s net profit in 2011 also increased significantly to 392.3 million yuan.
Analysts pointed out that these large LED companies hold nearly 2 billion yuan in cash, so they can continue to expand capacity in the face of slower market growth, thus gaining a larger share of government-supported LED projects.
In a report, UBS said that Dehao Runda has added 50 metalorganic chemical vapor deposition (MOVCD) devices for the production of LED chips, and this year will increase by 100. Sanan Optoelectronics also plans to increase the number of such devices.
The Ministry of Science and Technology of China previously stated that it plans to expand the scale of China's LED industry to 500 billion yuan by 2015. Analysts pointed out that in 2011, the size of China's industry was 31 billion yuan, and industry integration has become a top priority.
The collapse of weaker companies will benefit the development of larger, government-backed LED companies, giving these companies a certain advantage in international competition. Other major LED companies in Asia include Taiwan's Jingyuan Optoelectronics and South Korea's LGInnotek.
Next year's trend is still optimistic. The cyclical decline in demand for LED chips in the market, as well as the apparent overcapacity has affected the price of LED chips and the profitability of related companies. Despite the seasonal increase in demand for LED chips earlier this year, market fundamentals are still weak.
According to UBS's report, Taiwan's LED company's revenue growth rate in April fell to 3, down from March's 12. The company's share of the global packaged LED chip market is about 19.
HSBC analyst Jerry Tsai said: With the improvement of backlight technology, the LEDs used in TVs and displays will be reduced, and we will see real demand problems. If the price of this year's products drops by another 20, then the industry will face even greater difficulties next year.