Government subsidies are narrowing the supply and demand structure of the LED industry will gradually improve

As an emerging industry, LED lighting has won the nation's “pampering” since 2009, and the subsidy is huge. Even some government subsidies received by some enterprises account for half of the performance, turning the company into a profit. Statistics show that taking Sanan Optoelectronics as an example, as the LED industry's “subsidy for a brother”, it received various subsidies exceeding RMB 3 billion from 2010 to 2015.

According to analysis, the expected development trend is that as the LED industry matures and shuffles, during the “13th Five-Year Plan” period, the government gradually adjusts the subsidy policy, and upstream chip subsidy is gradually narrowing. The narrowing of subsidies at the government level will restrain the disorderly expansion of LED chips from the source of the industry chain, and it is expected to shift subsidies to LED lighting applications. The LED industry chain will be pulled from the demand side, and the supply and demand structure of China's LED industry chain will gradually improve.

LED lighting market penetration accelerates small pitch display will usher in the outbreak

2016 was a year when the small-pitch LED screen products were booming, and even the situation that the upper reaches of the third quarter were out of stock and in short supply. In 2016, the total demand for small-pitch indoor and outdoor LEDs was 141.3 billion. Currently, the production capacity of small-pitch LEDs is about 70 billion, and the gap between supply and demand will remain large in the future. We expect that the small-pitch display will usher in an explosion in the next 2-3 years.

In 2017, the replacement ratio of small-pitch LED to DLP can reach 40-50%, and by 2020, the substitution rate can reach 70%-80%.

LED manufacturers' new blue ocean 2017 infrared LED/laser lighting welcome unlimited business opportunities

The introduction of biometric technologies such as smartphones, tablets, and wearable devices worldwide will continue to increase rapidly. IRLED components are used in applications such as irises and face recognition, making the market potential for growth in the future. It is estimated that the output value of IR LED output (without sensors) will reach 710 million U.S. dollars (approximately RMB 4.711 billion) by 2020, and the compound annual growth rate will reach 24%, becoming a new blue ocean for LED manufacturers.

On November 13, 2016, Nakamura Shuzo Laser Lighting Laboratory was unveiled in Shenzhen. Laser illumination has a smaller light emitting area, higher luminous efficiency, and easier sensory focusing and longer illumination distance. It can be widely used in automotive headlights and other fields. In automotive lighting applications, the world-famous automotive brands such as BMW and Audi are currently working hard to apply this technology to new products. However, due to the current high cost of laser lighting, resulting in low application rate, I believe that the future will be a major trend.

Backward production capacity phasing out LED industry from the era of excessive competition into a stable income era

Since the second half of 2016, with the continuous and substantial increase in raw materials such as circuit boards and gold wires, as well as the increase in the cost of labor and rent, LED companies have also shifted from "price wars" to "value wars." Since 2016, LED chips and packaging prices have risen in succession, marking the end of the reshuffling of the LED industry chain as a whole, and the industry has entered a stable revenue era from an era of excessive competition. It is estimated that in 2017, in the overall LED industry in the cycle of rising prices and rising prices, some uncompetitive SMEs will gradually be eliminated from the market. Future orders will gradually be concentrated in various large companies, and the phenomenon of Evergrande in the LED industry will become more apparent.

Sanan Photoelectric raised the first shot of 2017 price increase, and raised the price of S-30MB/S-32BB series products by 8% on January 10, 2017