Competition intensifies, LED companies merge vertically and horizontally to perform

With the gradual advancement of energy-saving policies in various countries and the explosion of demand, the global LED industry has entered a period of rapid development. Starting from October 1 this year, my country will ban the import and sale of incandescent lamps for general lighting of 60 watts and above. Starting from October 1, 2016, the import and sale of incandescent lamps of 15 watts and above will be prohibited. This basically means that incandescent lamps will be completely discontinued and banned. In the next two years, my country's demand for LED light bulbs will usher in explosive growth.

Busy with production expansion

Currently, many major LED chip manufacturers are rushing to purchase MOCVD from upstream equipment manufacturers. Upstream chip companies such as Sanan Optoelectronics and Huacan Optoelectronics continue to expand production, which shows that the LED boom is extraordinary.

Sanan Optoelectronics invested tens of billions to purchase MOCVD equipment to increase to 200 units, Huacan Optoelectronics invested 1.18 billion to expand epitaxial wafer production capacity, Nationstar Optoelectronics expects to increase packaging production capacity by 40% in the middle of this year, and Qinshang Optoelectronics plans to invest 500 million to expand its main business.

The combination of vertical and horizontal performances is "perfect"

As the explosion point of the LED lighting market approaches, competition in the industry intensifies, and the battle for consolidation in the LED industry will intensify. Either they will team up for warmth or join forces, and the intention for two-way cooperation between enterprises will become increasingly obvious.

As for the direction of integration, there is no unified path within the industry. Previously, Dehao Runda took over NVC Lighting and completed the merger and acquisition of the integrated industrial chain; chip manufacturer Tongfang Co., Ltd. skipped packaging and directly acquired the downstream lighting application factory Zhenmingli. Sanan and Sunshine Lighting have also vertically integrated upstream and downstream to open up the entire LED industry chain.

As a packaging manufacturer, Ruifeng Optoelectronics is more inclined to expand upstream and become a light source supplier. However, Nationstar Optoelectronics is going in the opposite direction and expanding into the lighting field through subsidiaries.

In addition to the above-mentioned company's vertical integration strategy, Huacan is more inclined to horizontal expansion. Bian Difei, vice president of Huacan Optoelectronics, once said that Huacan may have horizontal integration but will never do vertical extension.

On April 28, Huacan Optoelectronics temporarily suspended trading on the grounds that it was planning major events. Its important events arouse people's imagination. It is reported that Huacan Optoelectronics’ suspension is due to its intention to acquire Blue Crystal Technology, which is also in the LED upstream.