Hua Can Optoelectronics' various proposals have recently been approved by the shareholders' meeting. Following the approval of CFIUS (US Foreign Investment Committee), the company's issuance of shares through the acquisition of Harmony core (Yiwu) Optoelectronics Technology Co., Ltd. indirectly acquisition of the new semiconductor issues again made new progress.
Yu Xinhua, chairman of Huacan Optoelectronics, told the China Securities Journal that after two years of downturn, since the second half of 2016, LED chips have set off a wave of price increases. The performance of leading enterprises in the industry has rebounded remarkably, and the competition in the industry has gradually changed to a benign situation. The market share will accelerate the concentration of enterprises with technological and scale advantages. In recent years, the company has successively acquired Yunnan Lanjing Technology (completed) and Meixin Semiconductor (in progress). The company's mergers and acquisitions focus on the industry's cutting-edge technology and industry chain synergy, and will continue to promote international cooperation and mergers and acquisitions in the future.
Market concentration
After the price war in the past two years, the LED industry set off a wave of price increases at the end of 2016, and continued until 2017.
According to industry sources, in the late stage of the price war, small and medium-sized backward production capacity gradually withdrew from the market, and the increase in raw materials, especially industrial metals, and the increased voice of leading enterprises became the basis for product price increases. Overall, the global LED market growth is expected to slow down, but the trend is still upward. The industry competition is still fierce, but it has gradually changed to a benign situation, and the price war space between enterprises has narrowed. With the gradual clearing of the “phasing out the incandescent roadmapâ€, consumers’ demand for product quality has improved, and the era of low-quality and low-price competition has become a thing of the past. The competition in the LED market will be more orderly.
Yu Xinhua pointed out that the annual production capacity of small and medium-sized manufacturers of 100,000-200,000 pieces is difficult to meet customer procurement needs, and the demand of downstream customers is gradually concentrated in large-scale manufacturers. At the same time, domestic large-scale LED manufacturers have obvious advantages in international competition. Overseas customers tend to meet demand through external acquisition chips. The increase in overseas markets will improve supply and demand. After the expansion of Huacan Optoelectronics, it is expected to receive orders from more well-known large enterprise customers. “The capacity expansion of leading companies such as Huacan Optoelectronics is mainly based on customer demandâ€.
In this context, domestic LED chip listed companies have expanded their production capacity, including Sanan Optoelectronics, Huacan Optoelectronics and Aoyang Shunchang. Among them, Huacan Optoelectronics, with the Yiwu plant put into operation, is expected to have a production capacity of 1.3 million pieces/month in the third quarter of this year and 1.6 million pieces/month in the fourth quarter.
In terms of new technology research and development, Huacan Optoelectronics began to increase investment last year. Among them, infrared LED is expected to be mass-produced by the end of this year. The cooperation with famous manufacturers to develop Micro-LED projects has also achieved initial results. The company's research and development of laser and deep UV are actively deployed.
Layout LiFi field
In 2015, after acquiring the blue sapphire substrate manufacturer Yunnan Lanjing Technology, in 2016, Huacan Optoelectronics planned to acquire MEMS sensor faucet Meixin Semiconductor.
Yu Xinhua said that the acquisition of Meixin Semiconductor mainly focuses on the synergy between the LED and sensor industries, while focusing on the layout of the LiFi (visible light communication) industry. At present, the new MEMS sensors of Mesin Semiconductor have shipped more than 1 billion units, covering consumer electronics, automotive electronics and industrial control. As a key safety component of airbags, downstream customers of Mesin's high-precision accelerometers include Ford, GM, BMW, Mercedes-Benz, and Microsoft. The acquisition of Midea Semiconductor will help promote the company's LED products into the automotive industry supply chain.
In recent years, the production cost of LED chip products has been declining. These quality control experiences are conducive to optimizing the production and operation of Meixin Semiconductor. In addition, sensors and LED chip products are an important part of LiFi technology applications. Compared with the current mainstream WiFi, LiFi technology has obvious advantages in terms of capacity, efficiency and security. After the completion of the merger, the company's advantages in sensors and LED chips help the company to lay out in advance in the LiFi field.
Yu Xinhua also said that the company's major shareholders will use IDG Capital's resource integration advantages to continue to introduce overseas advanced technologies and enterprises into the domestic market, and promote international cooperation and overseas mergers and acquisitions.
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