“When I turned on my phone, I saw a lot of text messages, and many factories were looking for me.” Wang Donglei, chairman of Dehao Runda, pointed to his phone and said.
The factory Wang Donglei refers to refers to the epitaxial chip companies upstream of LEDs. Recently, he said in an interview with reporters that at least three epitaxial chip companies are currently seeking the acquisition of Dehao Runda.
And this may be just the tip of the iceberg of the "crisis" of the LED chip industry. Data shows that in 2009, there were 62 LED chip companies in China, but now only more than 20 are in normal production. What’s even more frightening is that many industry insiders predict that there may only be three or five chip companies left in the future.
60% of companies are gradually withdrawing
According to relevant statistics, the total output value of the domestic LED chip industry in 2009 was more than 2 billion yuan, and the number of companies divided by region reached 62. Among them, there were 10 LED chip companies in Guangdong at that time, 8 in Fujian, and dozens of others located in more than a dozen places including Jiangsu, Hubei, and Shandong.
Today, many of the companies on the list no longer exist. Ruan Jun, executive deputy secretary-general of the National Semiconductor Lighting Engineering R&D and Industry Alliance, revealed that there are currently more than 20 chip companies in mainland China producing chips.
This also means that in just five years, almost 60% of chip companies have gradually exited the market. The reporter learned that not all "60% of the companies" here have closed down, and there are still about 10 companies in a "vegetative state."
Hefei Rainbow Blu-ray Technology Co., Ltd. has been semi-stopping production for a period of time this year. In 2010, the company's LED project officially started construction. According to the plan at the time, the total investment in the project was 10 billion yuan. It will take three years to build 200 MOCVD (more than 45 pieces of machines) and supporting chip production lines in two phases.
According to reporter calculations, if this plan is successfully completed, Hefei Rainbow Blu-ray Technology Co., Ltd. will become the top two companies in China with the number of MOCVDs. However, from the end of December 2013 to May this year, the company was in a state of semi-suspended production for half a year, and it was not until June that it slowly resumed production.
Now, some companies on the verge of bankruptcy are doing everything possible to seek acquisitions. Wang Donglei made it clear that there are currently at least three epitaxial chip companies hoping to find Dehao Runda for integration. And these chip companies still have a certain position in the industry. "Even the smallest ones don't come into my eyes."
Hang Hua, vice president of Yingrui Optoelectronics Technology (Shanghai) Co., Ltd., analyzed that because small and medium-sized enterprises do not invest much in R&D and their scale is not enough, the gap between them and large enterprises will become wider and wider, and some enterprises will suffer. The brightness of chips increases every quarter. For chip companies, if the brightness does not increase for a period of time, it is easy to fall behind.
Only three or five companies will be left in the future?
Wang Donglei believes that the current domestic market cannot absorb the production capacity of more than 20 chip companies. If lighting products made in China only supply the Chinese market, then one upstream chip company will be enough.
However, he also emphasized that Made in China serves the world. The current consensus is that the future manufacturing base of LED lighting will be in China. Previously, Wang Donglei has always believed that the upstream LED industry cannot escape the development of the semiconductor industry, and there may be only 3-5 LED epitaxial chip companies left in the world.
Wang Donglei is not the only one who holds the "three or five schools theory". In June this year, Jiang Zhongyong, general manager of Hangzhou Silan Mingxin Technology Co., Ltd., said that only companies with cost control capabilities, technological leadership, stable product quality, and large-scale production capabilities can stay. There are currently about 20 domestic LED chip factories in production, which is still too many. Judging from market demand, only five LED chip factories will continue to exist in the next five years.
In fact, from a quantitative perspective, there are currently far more than 5 listed companies involved in LED chips in China. If the "three-five companies theory" is established, the future reshuffle may further expand to listed companies with stronger funds.
But even so, many companies are still expanding production. On December 9, Dehao Runda flip-chip chips were put into mass production in Bengbu, Anhui Province. According to company insiders, the current flip-chip chip production capacity is 15,000 pieces per month. The company plans to achieve a production capacity of 50,000 pieces by the second phase of the fourth quarter of next year. The company's current formal chip production capacity is 50,000 pieces per month. This also means that Dehao Runda’s chip production capacity will be doubled by next year.
In addition to Dehao Runda, Huacan Optoelectronics, Sanan Optoelectronics and other companies have also announced production expansion plans this year.
There is no one to take over the sale of old equipment
It is easy for capital to come in but difficult to exit. Industry insiders said that it is now very difficult for some chip companies to retreat because it is not easy to dispose of old equipment. "It is very difficult to sell old equipment. Some time ago, the price was even offered at a 10% or 20% discount."
The price of new equipment has dropped, but its performance has improved, which is the first obstacle encountered in selling old equipment.
It is understood that compared with 2011, the price of new MOCVD equipment has dropped by about 40%. The price of new equipment has dropped significantly, and old equipment has lost its price advantage. "The most critical issue is that equipment costs have dropped. Equipment that used to cost 100 yuan may now be available for 70 yuan," said Wang Lianghai, vice president of Tongfang Holdings (600100, SH).
Not only that, on the basis of price reduction, the performance of new equipment has been greatly improved. The above-mentioned industry insiders said that the current equipment has a higher yield rate and is more intelligent. Now a computer host can manage 3-4 MOCVD equipment at the same time. In the past, one machine had to be guarded by one person. In this way, companies don't want to buy old machines. "New equipment is getting smarter and smarter. For old equipment, if current workers don't know how to operate it, they have to hire special people, which is more troublesome."
He also said that important equipment such as MOCVD is often associated with land and factories. When selling equipment, companies generally require the entire factory to be "packaged". This is equivalent to building a branch factory for the buyer, which causes great inconvenience to the management of the company. In addition, the debts and relationships with local governments involved in MOCVD equipment are complicated, so few buyers are willing to sell them.
Wang Lianghai made it clear to reporters that he may not be willing to buy old equipment even if it is discounted by 30 to 40%, "it is better to buy new ones." Dehao Runda also has little interest in those LED chip companies and equipment that are not functioning. Wang Donglei believes that there are not many companies with acquisition value. He smiled and said: "Take your time and take a look."
ANNA