In 2018, the output value of LED chips in China will reach 22.5 billion yuan, an increase of 19.7% over the same period last year, and the production capacity of the top three enterprises in the market will reach 47.8%. With a large number of technical experts and teams from Taiwan and South Korea joining the local enterprises, the average technology level of domestic LED epitaxy chip enterprises has made considerable progress, and has reached the international advanced level. The following is the environmental analysis of the LED chip industry.
The environmental analysis of LED chip industry, after years of development, the price of LED chip has been reduced through the improvement of light efficiency. According to the analysis of LED chip industry, the cost of chip production mainly consists of variable cost and fixed cost. The variable cost includes substrate, metal organic reactor and gas, accounting for about 65%, and the fixed cost includes depreciation and other costs accounting for about 35%.
With the gap between domestic technology and international large-scale factory technology becoming smaller and smaller, due to production costs and other factors, coupled with the active promotion of domestic government policies, foreign enterprises slow down the pace of expansion, and even some enterprises gradually shrink production capacity, the domestic LED chip production capacity proportion is getting higher and higher. In the long run, the domestic LED chip market will continue to expand. Now from two major consequences to analyze the LED chip industry environment.
The first consequence is that small countries or countries newly entering the IC industry have no economic strength to pursue the most advanced process technology. Environmental analysis of the LED chip industry, Taiwan and Korea are fully supported by the government. They have entered the industry since decades ago when the investment needed by IC factories was not so large. After a virtuous cycle of factory maintenance, the high profits of old factories can be used to support the investment of new factories. However, due to a slight shortage of investment, IC enterprises in Europe and Japan are now unable to pursue the most advanced process technology. The world's most advanced IC process technology is only in the hands of three companies: Samsung, TSMC and Intel. At present, the only possible catch-up is China.
The second consequence is that such a high-priced factory building, relying on their own products generally can not fill capacity, the consequence is that the cost of their own products soared. In order to fill capacity and spread costs, all manufacturers with the most advanced technology must contract for other companies. This led to the differentiation of the IC industry into FABLESS, which has no factory but design and marketing departments, and FAB, which manufactures for other enterprises. LED chip industry environment analysis, TSMC is only OEM, no IC products of its own brand. Samsung and Intel both have their own brand IC products, but they also work for other companies. There are also some IC enterprises in the world, which have a high market share in a specific industry, and the process technology of IC factory is not high, and the cost is not high. These enterprises do not need to work for other families. It is enough for them to produce IC designed by themselves.
Environmental analysis of the LED chip industry, due to the policy support of the Chinese government and the intensive investment in R&D funds of enterprises, and accompanied by a large number of technical experts and teams from Taiwan and South Korea joining the local enterprises, the average technology level of domestic LED epitaxy chip enterprises has made considerable progress, and has reached the international advanced level. The technology threshold in the field of LED chips is high, the competition in the field of LED packaging is fierce, and the industry concentration is constantly rising; the penetration rate of the industry in the field of LED application is constantly rising, the growth rate of traditional applications is slowing down, and the growth rate of new applications is faster than that of traditional applications.