What is the intention of Qianzhao Optoelectronics to suspend trading? Harmonious?

Recently, Qianzhao Optoelectronics issued an announcement on the grounds of major asset restructuring matters. The company will continue to suspend trading. The company plans to announce a major asset restructuring plan or report before June 18 and then resume trading. The motives and intentions behind it are open to speculation.

However, due to the arrival of the LED explosion period, the LED upstream chip industry has gradually shifted from the original technology competition to scale and capital competition. Domestic chip companies want to take the opportunity to integrate mergers and acquisitions, or expand production and capacity to strengthen themselves and become giant companies.

For example, Sanan’s previous acquisition of Lumen of the United States was to firstly expand sales channels with the help of Lumen’s customer network; and secondly, to improve the performance of Sanan’s products. After that, it went on to acquire Taiwan's second largest chip company, Canyuan Optoelectronics, which not only increased production capacity, but also effectively made up for Sanan's current weak high-power LED chip technology, and entered the international market with Canyuan's patent advantages. Recently, Sanan has made another big move, investing 10 billion yuan to build LED epitaxy and chip R&D and manufacturing industrialization projects.

Not only Sanan is like this, Huacan is also making frequent moves. Huacan previously produced high-quality LED epitaxial materials and chips based on GaN-based blue and green light series products. After the implementation of the first, second and third phases of Huacan's epitaxial chip projects, it not only greatly increased the production capacity of the original main products, but also added red and yellow light LED epitaxial chip projects, improving the company's product structure. On April 17, 2014, Huacan issued an announcement to subscribe for 10% of Semicon Light's shares. This approach is nothing more than looking for an outlet to the sea.

The development trajectories of chip companies are basically similar: expanding production capacity; entering the international market; improving product structure. Qianzhao Optoelectronics has been committed to the production of red and yellow light chips. Although Qianzhao Optoelectronics has great advantages in this regard, the production of a single chip will naturally lead to a single business. Now manufacturers are more willing to choose chip companies with full-color products. Currently, the full-color display with the fastest growth rate in the display industry requires the use of red, blue, and green chips.

Qianzhao Optoelectronics has consciously developed full-color LED chips. For example, it previously wanted to acquire Dongguan Zhoulei, but failed to do so. However, it successfully acquired Longyao Optoelectronics, which specializes in LED blue light epitaxial chips. The acquisition of Longyao just made up for the lighting shortcomings of Qianzhao Optoelectronics. However, Longyao's production capacity and technology are lacking. Compared with Longyao, Yuanrong Optoelectronics has a greater advantage in blue and green light chips, and they have also established a merger and acquisition and restructuring fund, with intentions in this regard, and strong alliances are also a trend among chip companies. Why is Qianzhao Optoelectronics suspended? Perhaps there is an answer.