Another kind of chip confirmed price rise, this time the “initiator” is apple, Samsung and other consumer electronics giants.
According to the latest report of the optoelectronic research office of trendforce, as apple, Samsung and other big brands plan to launch notebook computers, tablet computers, televisions and other products fully equipped with miniled backlight display this year, the supply chain has started to pull goods in the fourth quarter of 2020 ahead of schedule, resulting in a sharp increase in the demand for miniled chips and further squeezing out the supply of conventional chip capacity.
The report points out that in order to avoid the shortage caused by the rising prices of raw materials and tight production capacity after the Spring Festival, downstream manufacturers have begun to actively stock up, but some models and specifications are not available in stock. In the face of structural shortage, some LED chip manufacturers have gradually increased chip prices of non core customers and low margin products, with an estimated increase of about 5-10%.
Among them, small and medium-sized customers with less purchase volume will take the lead in price increase; If the first-line customers with more flexible bargaining power do not accept the price increase, they need to accept the delivery period of more than 2 months, which is significantly longer than the usual two-week delivery period.
The launch of “quasi star products” is imminent, and the capacity gap has emerged
In fact, LED chip prices since the fourth quarter of 2020, there have been repeated rumors. According to media reports, Huacan optoelectronics, one of the leading enterprises in China, adjusted the price of white light chips for lighting in November last year, with an increase of about 6% – 8%. After the increase, the price is about 80 yuan / piece (2-inch piece). From the perspective of the whole market, the price has increased by 10% – 15% compared with the beginning of last year.
Zou Lanlan, analyst of Great Wall Securities, pointed out in the report on December 2, 2020 that with the further alleviation of the overseas epidemic, the emerging applications of miniled will drive the demand growth, the head LED chip factory is expected to gradually withdraw from the low-end LED production capacity, and the industry supply-demand relationship will continue to improve.
Since then, Guo Mingxu, a famous analyst, reported that Apple will release 12.9-inch iPad Pro products with miniled backlight in the first quarter of 2021, and will further launch miniled products in the future. Subsequently, Samsung will release neoqled TV with miniled light source, which is the heavyweight products of the two giants. Undoubtedly, it will bring great impetus to miniled business.
Ma Liang, analyst of Anson securities, pointed out in the report on January 14 that under the guidance of wind vane, the penetration rate of miniled terminal is expected to accelerate in the future. In terms of market size, according to GGII and Guoxing optoelectronics, it is estimated that the market size of miniled backlight will reach about US $1.1 billion in 2023, and the market size of display will reach US $660 million.
Trendforce believes that the rise in chip prices caused by this structural shortage is mainly due to the lack of awareness of the industrial chain at the initial stage of the outbreak of emerging application demand, underestimating the capacity occupation of key production links, and the subsequent capacity crowding out effect, which is expected to be solved within half a year.
In addition, the clearance of production capacity brought by the low ebb of LED industry in the past few years has led to the increase of supply concentration of upstream sapphire substrate, PSS and other key materials, as well as the improvement of suppliers’ bargaining power. Faced with the rise of material cost and the contraction of supply at the same time, the trend of price increase has been triggered.
There are many participants in the process of “recruiting and buying” to expand production
It is understood that the price increase of LED chips is located in the upstream of the industrial chain. In terms of manufacturers, the main players in the LED chip market include domestic enterprises such as San’an optoelectronics, Huacan optoelectronics, Aoyang Shunchang, etc., and overseas enterprises such as Jingdian, Longda, etc.
According to crystal power’s estimation, the chip end volume will be about 3-4 months ahead of the downstream new product release, so the penetration of miniled in the downstream will accelerate, which will benefit the chip and packaging leading enterprises first. According to experts, the industrial research center estimates that when the penetration rate reaches 10%, the demand for miniled chips will reach about 878100 pieces / month (equivalent to 2-inch chips).
According to the trendforce report, at present, Jingdian has about 4-inch miniled wafers, with a monthly shipment of 150000 wafers. As the gross profit of miniled chips is much higher than that of traditional LEDs, Jingdian takes reducing the production capacity of low gross profit products as a coping strategy.
San’an optoelectronics and Huacan optoelectronics benefit directly from the order transfer effect of crystal electric customers. In addition to the continuous growth of demand for traditional backlight and direct display RGB chips, both of them also benefit from the surge of demand for miniled chips. The shipment volume of about 4-inch miniled chips also reaches tens of thousands of chips per month.
It should be pointed out that since the third quarter of last year, Huacan optoelectronics has achieved nearly full capacity utilization for two consecutive quarters. At the same time, due to the accident in Tongxin optoelectronic factory last month, the production capacity of 400000 pieces of PSS was shut down, which led to the price increase of 5-10% of the upstream key materials such as sapphire substrate and PSS, which may further aggravate the price increase and shortage of chips.
San’an optoelectronics is bound in advance of the big factory. According to the company’s announcement in February 2018, Samsung Electronics signed an advance payment agreement with its subsidiary Xiamen San’an. Samsung paid 16.83 million US dollars to San’an Optoelectronics in advance to establish a long-term business partnership, and San’an will supply a certain number of LED chips for display screens to Samsung Electronics. At present, the company has supplied miniled chips for Samsung in bulk.
Terminal volume is coming, the company has also “recruit” and started to expand production. As a link in Apple’s industrial chain, crystal power has switched 50% of its production capacity to miniled in Taiwan under the promotion of mass production orders from key customers, and is expected to achieve 95% of its production capacity conversion in the first quarter of 2021, according to Ma Liang’s 14 th report of Anson securities.
Sanan optoelectronics, Huacan optoelectronics and Qianzhao optoelectronics also have plans to expand the production of miniled. Among them, San’an optoelectronics is expected to launch the mini / micro display chip industrialization project in March 2021; According to the company’s announcement, Huacan optoelectronics and Qianzhao optoelectronics have raised funds for R & D and manufacturing projects such as mini / microled.
Editor in charge: Tzh