LED packaging equipment industry market status and trends

Key Analysis

This week, the key stocks in the LED industry trended better. The industry index rose by 2.4 percentage points, and the 17 key stocks in the industry rose by 17%, with an average increase of 4%.

At present, the market concentration of LED packaging equipment has increased year by year, and many small and medium-sized enterprises have withdrawn from the market. However, the rapid development of the LED packaging industry has become more and more demanding for existing packaging equipment companies. GGII believes that LED packaging equipment companies can only continue to survive in the future market by keeping up with LED packaging companies and constantly breaking through existing technology bottlenecks.

Market review

This week's high-tech LED industry index this week, the high-tech LED industry index closed at 1316.9 points, up 2.4%, the Shanghai and Shenzhen 300 index closed at 2963.8 points, up 0.6%, the high-tech LED industry index performance is stronger than the broader market.

This week, 22 LED key stocks rose by 17%, with an average drop of 4%. Lehman Optoelectronics (300162) suspended trading and continued to suspend trading. Sanan Optoelectronics (600703), Qinshang Optoelectronics (002638), Huacan Optoelectronics (300323) and Weiwei (300317) saw a decline in the week, and the remaining 17 stocks all rose. Among them, there were 3 stocks that rose more than 10%, and Alto Electronics (002587) rose 18.4% to the biggest weekly decline.

LED packaging equipment industry market status and trends

First, LED packaging market status and trends

In recent years, with the help of the continuous growth of capital markets and downstream application industries, China's LED packaging industry has developed rapidly, the scale of enterprises has expanded rapidly, and the production capacity has grown at a high speed. The scale of the domestic LED packaging industry has continued to expand.

There are two main reasons for the rapid development of China's LED packaging: on the one hand, because most international LED packaging manufacturers are optimistic about China's domestic application market, they have set up production bases in China, increased domestic industry sales, and domestic companies to expand production capacity and investment. The production capacity was released. On the other hand, domestic LED packaging manufacturers are also constantly improving, making great progress in technology, patents and market, and the production capacity has been further expanded. China has become the main production base of global LED packaging.

However, due to the continuous expansion of domestic LED packaging capacity, domestic LED packaging competition has intensified, especially in 2015, due to the poor economic climate of the international market, market demand has slowed down, and the phenomenon of oversupply has become more apparent. In 2015, the competition in China's LED packaging market has become more and more intense. The prices of domestic packaging enterprises are almost swayed, and the prices of international LED packaging manufacturers have also fallen by more than 20%. According to GGII statistics, the scale of China's LED packaging industry is expected to reach 64.2 billion yuan in 2015, a year-on-year increase of 13%, and the growth rate is 7.1 percentage points lower than that in 2014.

Chart 1: China LED package output value and forecast for 2010-2020 (unit: 100 million yuan, %)

Source: Gaogong Research Institute LED Research Institute (GGII)

In 2015, the development of China's LED packaging industry showed the following characteristics: First, the pace of expansion of LED packaging manufacturers accelerated, and mergers and acquisitions were in a normal state; Second, most packaging companies entered the era of low profit, and increased revenues did not increase profits, and some enterprises even suffered losses. Third, SMEs are looking for new ways to go, and more than 200 packaging companies have closed down or exited the market.

With the rapid development of the LED industry, the penetration rate of the LED application market continues to increase. From the perspective of the industry life cycle, the LED industry has entered a mature stage, and the future LED market will be difficult to achieve rapid growth and turn into a steady growth trend. Especially the mid-stream package.

GGII expects that the growth rate of LED packaging market will further decline to less than 10% in the future. At the same time, participating companies will also rapidly reduce year by year. The market scale of LED packaging leading enterprises will grow rapidly year by year, and market concentration will increase rapidly.

Second, LED packaging equipment market status and trends

In 2012-2014, China's LED application market demand is strong, especially in the LED lighting market. As a result, major packaging companies have expanded their production capacity to cope with market demand. At the same time, the scale expansion advantage of the company's capacity expansion is better. Reduce production costs and enhance the competitiveness of enterprises. Therefore, enterprise expansion or mergers and acquisitions has become the theme song of LED packaging companies in the past two years.

Encapsulating large factories to expand production scale strength, in fact, is also to promote the industry to accelerate the elimination and reshuffle, large enterprises from which to accelerate the integration of resources, expand the strength, for the future market development to make advance layout.

In 2015, the slowdown in LED application market demand has intensified the already fierce LED packaging market. The price of most LED packaging devices in China has fallen by more than 50%, and the price of international LED packaging manufacturers has also fallen by more than 20%.

GGII expects that the competition in China's LED packaging market will remain fierce in the future. The survival of the fittest will become the theme of the next few years. The large enterprises will become more and more obvious, and small and medium-sized enterprises will close down or withdraw from the market.

As the main supporting industry of LED packaging industry - LED packaging equipment industry will also follow the development of LED packaging industry.

In recent years, the LED packaging equipment market has developed rapidly following the expansion of LED packaging. However, in the past few years, China's LED packaging equipment market has been largely monopolized by foreign equipment companies, especially solid crystal and wire bonding equipment. In recent years, domestic LED packaging equipment enterprises have increased investment in research and development, product performance has been rapidly improved, and the localization rate of LED packaging equipment has increased rapidly year by year. From the point of view of specific equipment, at present, the wire bonding machine still relies mainly on imports, and the localization rate of other equipment such as solid crystal machine, dispensing machine, spectroscopic and taping machine has exceeded 50%, among which the localization of the beam splitting and taping machine Rate over 95%, dispensing

Machine-made alternatives are also accelerating.

LED packaging equipment has developed rapidly in recent years, and the enterprise positioning and market structure of various equipment fields have taken shape. GGII research understands that in terms of solid crystal machine, Xinyichang has become the leading enterprise of domestic solid crystal equipment relying on its high cost performance and supporting services. In terms of dispensing machine, Tengsheng has become a domestic dispensing machine relying on its full range of high precision equipment. Leading companies; in terms of spectroscopic and tape machine, Hyun Shuo photoelectric shipments have been far ahead.

Specifically, LED packaging equipment companies will cooperate with the LED packaging industry to present the following trends:

First, equipment efficiency continues to increase rapidly.

The current LED lighting products are still relatively expensive compared to traditional lighting products, the market acceptance needs to be improved, and the price drop is the most intuitive way to increase market acceptance. The improvement of production efficiency is the most important means to reduce costs, so high-efficiency equipment is the main manifestation of competitiveness.

Second, the improvement of after-sales and ancillary services.

China is a big LED producing country. With the increasing concentration of various industrial chains, the leading enterprises in the future industrial chain will inevitably be billion-billion-scale enterprises, thus forming a few real-scale production bases. Only by supporting the services and after-sales service can the supporting enterprises become long-term partners of giant enterprises.

Third, the degree of automation of equipment has increased.

China vigorously develops Industry 4.0 and China Manufacturing 2025. In the future, with the continuous improvement of labor costs, the automation of production equipment will be an inevitable development trend in the future. This requires LED equipment companies to lay out automation equipment early or continuously improve equipment automation.

Fourth, the guarantee of equipment quality and service.

When the market concentration continues to increase, the concentration of customers in equipment enterprises will continue to increase, and the loss of any one customer will lead to a huge decline in the performance of equipment companies. Therefore, equipment companies can only guarantee the quality of equipment and provide good customer service. Customers form a stable and long-term cooperative relationship, thus ensuring their own competitiveness in the market is constantly improving.

Analyst:

Name: Li Shengfa

Email: sf.

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Gaogong LED Industry Research Weekly (20160201-20160205)

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