Relying on the advantage of official subsidies, Sanan Optoelectronics is regarded as the "culprit" of overcapacity

The global LED industry is expected to slow down production capacity due to the slowdown in mainland China's official equipment subsidies. However, according to Epistar's estimates, there are currently 2,000 MOCVD machines worldwide, and 250 more are expected to be added this year. Sanan Optoelectronics accounts for 100 units, and equipment production capacity is still oversupplied.

Li Bingjie, chairman of Jingdian, estimates that there are about 2,000 MOCVD machines in the world. This year, 250 new machines are expected to be added, but 200 will also be eliminated. However, the new machines are large machines, so the overall equipment production capacity is still excess; among the 250 new machines, Sanan Optoelectronics accounts for 100 units, Neojing Electronics accounts for about 40 units, and the remaining manufacturers contribute a total of 110 units.

There are currently about 2,000 LED machines in the world, and 250 more are expected to be added this year, of which Sanan Optoelectronics will account for 100.

Sanan Optoelectronics takes advantage of mainland China’s officially subsidized equipment and is regarded as the culprit of oversupply of LED production capacity. Industry observations show that Sanan has recently been working hard to produce and reduce costs. However, due to this wave of demand delays, a lot of inventory has been generated, so it has adopted a lot of inventory in the market. Adopt an aggressive pricing strategy; in addition, Sanan Optoelectronics' Xiamen factory originally planned to place 200 MOCVD equipment, and has successfully received equipment subsidies for 100 of them. The remaining 100 equipment is subject to Document No. 62, and the industry has judged that it may not be able to successfully obtain the subsidy.

Recently, the subsidy industry in mainland China has shifted. Industry insiders said that in response to the shift in the official subsidy strategy, Sanan Optoelectronics will enter the manufacturing of gallium arsenide. The epitaxial wafer and manufacturing process of gallium arsenide are all areas that Sanan Optoelectronics will soon be involved in. Whether it will take the subsidy from gallium arsenide and return to support LED remains to be seen.

In response to the drastic changes in the environment this year, major domestic LED factories have tended to be conservative in their expansion of production this year, especially the introduction of new machines. New Century will replace the machines with modified machines this year. It plans to upgrade the 2-inch wafer equipment to 4-inch wafers through equipment modification, which will begin in August this year. OK; Epistar plans to introduce 40 MOCVD units. Compared with last year, after Epistar merges with Canyuan, its production capacity is expected to increase by 35% this year, and the production capacity utilization rate in the second quarter is about 70%. In the second half of the year, with the demand for LED lighting rising, at least one of Epistar's six production plants will be at full capacity.