As the saying goes, from a business performance results, some learned and future direction of enterprise development, for the LED chip companies, this year's LED chip market extraordinarily twists and turns, corporate earnings reports throughout the first two quarters of the LED chip, several related losses of the net profit of listed companies is declining and even closed factories, from a few years ago the scene of a nearly full up to a "red" this year, raising have changed. Recently, as the third quarter bookends, many in the industry has seen a glimmer of hope, the LED chip industry situation seems to be better, improve the main performance is no longer a huge increase in the inventory, some companies have begun to decrease inventory and operating income than the second quarter has the improvement, the downstream packaging enterprises in the third quarter begun procurement chip, it is this that LED chip began to rebound?
01, chip leading enterprise situation improved a glimmer of hope
First of all, according to the third quarter report of 2019 released by SAN 'an, inventory was under control, LED chips were waiting for reversal, and the core problem inventory did not rise significantly. The ending inventory of 19Q3 was 3.268 billion yuan, basically unchanged from the 3.238 billion yuan in the 19Q2 quarter. Second, jucan photoelectric suqian subsidiary started production this year, and the output increased every quarter. With the release of production capacity, the chips produced by the company have been sold, and the inventory in the third quarter did not continue to increase. Judging from these companies' performance, many industry insiders seem to have seen a glimmer of hope, but is this really the case?
As we all know, the law of the development and changes, things are from scratch, from less to more, from low to high, is the circulation of the cycle, the same about the chip industry, so the LED chip industry reversal still needs time, downward in the cycle inventory is very difficult to digest and need to wait until the boom of industry are stock fell sharply upward. Nowadays, most of the enterprises are no longer profitable at the current price, market participants are in the position of cash loss cost, the industry ushered in the bottom game. However, it is undeniable that behind the lost performance is the decreasing stable economic environment and the traditional market dividend. The LED chip industry * will eventually undergo an industrial transformation both inside and outside, and the situation will continue to deteriorate if it is not adjusted in time in the face of the industry's predicament.
02, policy adjustment, looking for emerging areas of both
In recent years, the localization of equipment has lowered the investment threshold of LED chip industry. In addition, local governments have provided large amount of equipment subsidies in order to attract investment, which jointly pushed China's LED chip industry into a period of rapid expansion of production capacity, which also LED to increasingly fierce competition in the LED chip industry, resulting in oversupply. In addition, from the overall economic environment, a trade war with China progress is not smooth, the U.S. tariffs on Chinese imports has become a fait accompli, although part of the order started off to Vietnam, Thailand and other southeast Asian countries, the local industry chain is not complete, however, the overall production cost is higher than China, in the short term is difficult to undertake production transfer from China.
This requires the country to timely adjust the chip industry policy, such as appropriate reduction of LED chip subsidies, at the same time, according to market demand, timely provide industry directory for investors to reference, avoid blind investment. As for enterprises, when LED chip production capacity is in the throes of clearing, it is a good opportunity for leading enterprises with core technologies and more independent intellectual property rights to expand and take advantage of the advantages of bottom-fishing mergers and acquisitions. It is expected that their advantages will be further consolidated to further improve the market concentration.
While LED chip prices are falling, a new round of expansion is quietly coming. Turning to small spacing, Mini/Micro LED and other high technical barriers, is a new round of chip enterprises in the battlefield. Mini/Micro LED is a promising display technology at the present stage *, and also the investment focus of the chip factory. Micro LED is subject to huge amount of transfer and other technical problems, and it will take some time to develop, but the relatively low technical threshold of Mini LED is expected to achieve rapid development in 2019 and 2020. In the early stage of the rise of new applications, terminal brands are more cautious in the selection of suppliers, and leading enterprises with deep accumulation of industry technology will benefit first.
LED chip industry is an industry with strong periodicity. To comply with this development trend, the competition among enterprises falls on cost and technology, relying on the luminous efficiency of products, yield and scale effect of production. The enterprises with poor product quality and low cost will be eliminated first. Although the LED chip "winter" do not know when to end, high inventory, high debt, high receivables and other problems still trouble most LED chip manufacturers, at this time, to ensure that the enterprise capital chain, reasonable layout of high-end applications, in order to survive the "winter" usher in a bright future.