When the price war is raging, nothing can touch the nerves of the LED industry more than "price increases".
In March this year, some product prices of some packaging manufacturers such as Mulinsen and Jingtai increased to a certain extent. Then in May, there was news that some chip products from LED chip manufacturers such as Epistar and Sanan had made corresponding price adjustments. Recently, the LED industry has once again heard news of an increase in the price of LED chips.
Many companies have raised LED chip prices
Some industry insiders posted a price adjustment letter signed "Xiamen San'an Semiconductor Technology Co., Ltd." in WeChat Moments. The letter stated: The current raw material market prices have generally bottomed out, with gold (up more than 27% from the beginning of the year) and substrate (up more than 30% from June). Materials such as these have increased significantly. At the same time, due to the small size of small and medium-sized power product chips, the back-end process consumes a lot of sorting and testing capacity, and the unit labor cost increases, which leads to a sharp decline in the output value of our company's chip back-end. Now, taking into account various factors, the company has decided to increase the prices of some small and medium-sized products by 10%, and it will be implemented on August 25, 2016.
In addition to Sanan Optoelectronics, the prices of some products of LED chip manufacturers such as Huacan Optoelectronics have also been raised to varying degrees.
Shi Songgang, marketing director of Huacan Optoelectronics, told the editor that the company has made corresponding price adjustments for some products that were originally relatively low-profit.
The relevant person in charge of a first-tier chip manufacturer also said that the price of his company's LED chip products has also been increased by 5%-10%.
An official from another second-tier chip factory said that since the beginning of this year, the prices of some of his company's LED chip products have been slightly increased several times.
It is worth mentioning that the price increases of several LED chip manufacturers include small and medium-sized chips. "The cost of small and medium-sized chips itself is relatively high. In addition, the competition among LED chip manufacturers in this field last year was too fierce, and their basic prices are low. The current price increase is only a reasonable correction." Shi Songgang said.
The person in charge of the above-mentioned second-tier chip factory believes that the price increase of small and medium-sized chips is mainly due to two reasons: First, due to some major packaging manufacturers concentrated on purchasing chips for the third quarter in August, resulting in tight supply of chips; second, due to the vigorous expansion of packaging manufacturers such as Mulinsen, the production capacity of LED chip manufacturers appears to be relatively limited. Chip factories will prioritize the production of medium and large-sized chips with relatively high profits. Small-sized chips are mainly produced in conjunction with some customers and supplied in limited quantities.
"Under such circumstances, it will become increasingly difficult for small and medium-sized packaging manufacturers to purchase chips." However, the person in charge also admitted, "The equipment for chip manufacturers to expand production has not been put into use so quickly. Once put into use, the situation of oversupply will reappear, so currently small and medium-sized packaging manufacturers The size shortage is only temporary. "
The person in charge of the above-mentioned first-line chip factory believes that the price increase of LED chips is due to the increase in raw material prices on the one hand and the shortage of chips in the packaging market on the other. Chip production capacity cannot keep up with the expansion of packaging production capacity. "This is not only true for small and medium sizes, but also for other types of chips."
Some packaging factories have increased product prices
Not only LED chip manufacturers, but also packaging manufacturer Mulinsen has also raised prices. A price adjustment letter signed "Shenzhen Mulinsen Light Display Technology Co., Ltd." circulated in WeChat Moments shows: Due to market changes, the cost of our products continues to rise. Based on the actual increase in raw material prices, the price of RGB lamp beads for display screens scheduled to be supplied to your company will be increased by 5% starting from September 1, 2016.
"The main reason is the increase in raw material prices."
In addition to Mulinsen, there are also rumors that several other companies that mainly focus on display packaging have also raised the prices of some products. Companies that focus on lighting packaging have not released any news of price increases for the time being.
"In terms of chips, the current supply is still based on previous orders. As for whether the price will increase in the future, we have not received a notice yet, and we have not heard of a price increase for the time being." Wang Gaoyang, deputy general manager of Hongli Zhihui, said that even if the price of LED chips is slightly increased, it will be difficult for packaging manufacturers to increase prices in response to the trend. "Generally speaking, LED packaging prices are in a relatively stable state."
Liu Lin, deputy general manager of Tongfang Optoelectronics, said that Tongfang specializes in high-power light sources and COB light sources and has not received notice of price increases for LED chips. "Generally speaking, LED packaging prices are still relatively stable."
Senior analyst Wang Fei analyzed that small-pitch LED displays have entered the market growth period, and the market size is expanding rapidly. Strong downstream demand and room for technological advancement will drive the rapid growth of small-pitch packaging and chip consumption. He believes that display and backlight packaging products will be driven by the demand for small-pitch displays, and there will be room for price increases. "And lighting packaging will face upstream and downstream squeeze." Wang Fei also analyzed that the price increases for LED chips and packaging since this year are essentially related to the popularity of the display market. The rapidly growing demand in the display market is transmitted to the display packaging and chip side, and this tight supply also spills over to lighting chips. The difference between display chips and lighting chips is that the epitaxial process is different, but there is competition in production in both epitaxial equipment and chip production equipment. When the display market is good, chip manufacturers will transfer part of their production capacity to display chip production, which leads to a tight supply of lighting chips.
"But overall, if lighting demand has not improved significantly, lighting chips will increase in price mainly to repair costs, and the price increase is not expected to be too large. While lighting packaging is facing rising prices for upstream materials, it is difficult to pass on the cost dilemma to downstream customers."
The hot demand for display screens can be seen from the semi-annual results of several major listed LED display companies. Absen achieved revenue of 509 million yuan in the first half of the year, a year-on-year increase of 11.69%; net profit was 60.7644 million yuan, a year-on-year increase of 37.60%. Orders for small-pitch displays amounted to approximately 233 million yuan, a year-on-year increase of approximately 65%, accounting for approximately 40% of the company’s total display orders in the first half of the year.
Unilumin Technology achieved revenue of 672 million yuan in the first half of the year, a year-on-year increase of 7.60%; net profit was 65.5283 million yuan, a year-on-year increase of 14.82%. The sales revenue of LED small-pitch products was 275 million yuan, a year-on-year increase of 63.98%, accounting for 40.97% of the company's total revenue; the order volume was 426 million yuan, a year-on-year increase of 76.78%.
Leyard achieved revenue of 1.732 billion yuan in the first half of the year, a year-on-year increase of 188.44%; net profit was 184 million yuan, a year-on-year increase of 125.67%. Orders for small-pitch LED high-definition displays have increased dramatically, and the current orders have exceeded 1.1 billion yuan (an increase of more than 100% compared with the same period last year).
ANNA