According to reports, the current international LED giants and many patents "anglers" have been collecting relevant evidence to prepare to prosecute China's LED manufacturers for infringement, if successful, China's LED industry may suffer a major blow. Of course, it does not rule out the possibility of "reconciliation" with "patent-for-market". However, the sacrifice of a patented "blade knife" may bring market opportunities to these giants, and it may also push their "prey" to the arms of Chinese local competitors. Therefore, "patent war", It is not yet known who the winner is.
Chinese LED companies may face patent crisis
According to reports, in China's LED industry, especially China's LED industry has gradually grown to reach an annual output value of 20 billion yuan, China's LED industry or will face the international giants of patent infringement litigation. It is reported that at present the international LED giants and many patents "anglers" have been collecting relevant evidence and are preparing to sue China's LED manufacturing enterprises for infringement. If they win the lawsuit, China's LED industry may suffer a major blow. Of course, it does not rule out the possibility of "reconciliation" with "patent-for-market".
Or affected by this news, on the 13th, the A-share market's LED sector index fell sharply 1.55% in early trading. In the late afternoon, non-ferrous metals, rare earth and other sectors under the strong lift, the LED plate index decline narrowed, fell 0.13% throughout the day . The whole day only Silan Micro (600460:16.69, +0.3, ↑1.83), National Star Optoelectronics (002449:23.91, +0.31, ↑1.31), Hongli Optoelectronics (300219), Ganzhao Optoelectronics (300102:30.35, +0.31, ↑1.03), Lehman Optoelectronics (300162:24.25, +0.13, ↑0.54) and other LED packaging stocks rose slightly, not exceeding 2%.
China's LED industry grows rapidly
LED, or light emitting diode, is a semiconductor device that can convert electrical energy into light energy. LED has the characteristics of energy saving, environmental protection, security, small size, long life, and rich colors, and is hailed as the third revolution of human lighting. It is expected that most of the traditional light sources will be replaced in the future.
At the beginning of the LED technology, due to the constraints of technical conditions and other factors, LED is only applied to the working status indication of home appliances, instrumentation, and consumer electronic products. After more than 40 years of development, the application of LED has gradually expanded to include Automobile taillights, outdoor variable signals, freeway intelligence signals, large outdoor display screens, and traffic lights, etc., are currently the most widely used high-brightness LEDs, accounting for more than 80% of the LED market. With the continuous expansion of the application scope, the global LED industry is developing rapidly. The high-brightness LED market alone is as high as US$8.25 billion (2009 figures). It is estimated that the global high-brightness LED market will reach more than US$20 billion in 2014. And more optimistic expectations that the global LED lighting in the next decade will have a market size of up to 10 trillion yuan (RMB).
The application of LED technology in China is basically in sync with the international, but the development of LED in China's industrialization is slower than that of the international LED industry. However, since 2000, the LED industry in China has been developing rapidly. As of 2009, China has a total of more than 3,000. Various types of LED manufacturers (including 25 epitaxial wafers and chip makers in the upper reaches of the LED industry, about 600 LED packaging companies, and about 2,500 applied production and processing companies), with an annual output value of 126 billion yuan (2010 data The output value of the epitaxial wafers and chips is about 4 billion yuan, the output value of the LED packaging is about 27 billion yuan, and the LED application is about 95 billion yuan, basically forming four major industrial clusters in the Pearl River Delta, Yangtze River Delta, Lancang Delta and the northern regions. The output value of the Pearl River Delta accounts for 35% of the country's total output value, the Yangtze River Delta accounts for 40%, the Handan Triangle accounts for 8%, and the northern region accounts for 5%.
With the continuous promotion of China's energy saving and emission reduction policies and the continuous implementation of LED energy saving and subsidy policies, China's LED industry will continue to grow and develop. It is estimated that China's LED market will reach 500 billion yuan in 2015, which is approximately four times the output value of about 126 billion yuan in 2010. This may mean the epitaxial wafer and chip manufacturing upstream of LED, and the LED packaging in the middle reaches. And downstream LED applications will achieve more than four times growth in the next five years.
Chinese LED industry may face industry reshuffle due to patent crisis
The tempting market prospect naturally leads to competing competitions of “good guysâ€. In this competition, China's LED industry may have become the "sacrifices" under the patent "sword knife" of the international LED giants because of lack of core technology, and the "sheep" that has grown up has become the "meat" of these giants.
According to research, China's LED industry has been developing very rapidly in the past decade or so, especially since China launched the "China Semiconductor Lighting Project" in 2003. The development of China's LED industry is very rapid. Facing the growing demand for LED applications in China and the unparalleled low-cost comparative advantages of China in the industrial manufacturing industry, China's LED packaging industry has developed very rapidly and has become the most widely distributed LED in the world. Packaging countries, accounting for 80% of the world's LED packaging capacity.
Rapidly growing LED packaging capacity has greatly stimulated the demand for epitaxial wafers and chips upstream of LEDs.
However, currently the design, technology, and production capacity of the epitaxial wafers and chips upstream of the LED in the world are basically dominated by Japan, Europe, America, and Taiwan. In 2010, Japan’s LED chip sales were approximately US$3.3 billion, which accounted for approximately 45% of global LED sales, about 30% in Taiwan, and approximately 20% in Europe and the United States. China's 2010 epitaxial wafer and chip output totaled about 4 billion yuan, but the localization rate is only about 49%. China's LED output value only accounts for about 8% of the global LED epitaxial wafer and chip market.
As the core of the LED industry chain epitaxial wafers and chips, China's localization rate is only about 49%, about 2 billion yuan, less than 4% of the global LED epitaxial wafer and chip market share, but China's LED packaging capacity accounted for More than 80% of the global LED packaging capacity. This also means that China's LED industry, especially the LED packaging industry, is highly dependent on the outside world. China's LED industry is largely due to the lack of sufficient core technology capacity to be in the "processing of materials." Low level of development. According to analysis, the entire LED industry, the upstream epitaxial wafers and chip makers earn 70% of the profits of the entire industry chain, the LED package of the middle reaches earn about 20% of profits, at the lowest end of the industry chain simple Applied production and processing companies only have 10% of profits. At present, China's LED industry is precisely the “flat triangle†with a wide base in the midstream and downstream. For LED packaging companies with a certain technical threshold in the midstream, the day is still “free,†but for the downstream Application-oriented production and processing companies can only get into helpless "price wars" on product application terminals.
It is precisely because of the status quo of China's LED industry that the international giants who hold the core technology of the upstream of the industry chain basically hold the “birth and death†of the development of this industry, and the patent is to implement this kind of “sports knifeâ€. ". Once international giants have “sold up†the “soldier knifeâ€, LED packaging enterprises and applied production and processing companies in the middle and lower reaches of the production relying on “processing of incoming materials†may have to withdraw from this market. This will prompt the whole industry to reshuffle, and the market share will also be concentrated on upstream companies with core technological advantages, and on packaging companies with economies of scale advantage.
"patent war" who is still unknown
However, it is clear that in the face of the Chinese government’s proposal in its 12th Five-Year Plan by 2015, China’s LED industry’s epitaxial wafers and chip localization rate will reach the goal of 70%, and it will also face Taiwan’s technological leadership due to cross-Strait issues. In terms of policy advantages and other competitive advantages, as well as the constant investment in Chinese LED epitaxial wafers and chip R&D and the continuous expansion of production capacity, it is clear that the LED international giants' calculations want to pass the “sacrifice†patent and the “Butcher†to “eat up†the Chinese LED. The "wishful thinking" of the market may not be very smooth. For these “late†“alien monksâ€, the ultimate goal may be to “change the market with patents.â€
Through patent authorization, LED packaging companies and various downstream application-type production and processing companies are controlled to establish their complete industrial chain system and gradually penetrate the LED market in China, especially the future LED lighting market. This may be the beginning of China's LED industry began "Warring States period."
For the current domestic LED companies, whether the upstream epitaxial wafers and chip manufacturers, the LED packaging manufacturers in the middle reaches or the downstream application processing manufacturers, will also face different opportunities.
If the international giants sacrificed their patents, they would undoubtedly increase the patent cost expenditure in the middle and lower reaches and gradually become the "door-to-doors" for these international giants. However, for the upstream epitaxial wafers and chip manufacturers, it also means that there will be opportunities to rapidly develop their own industrial chain system based on the advantages of lower cost localities. In particular, domestic LED giants that have been listed on the A-share market in recent years have rapidly expanded their production capacity through the capital market, or “strong alliances†or self-built systems, and gradually penetrated into the upstream, downstream, and terminal sales channels of the industry. Slowly established its own system. Therefore, "patent war" is not yet known.
Market outlook can be concerned about Sanan Optoelectronics and other stocks
As discussed above, attention can be given to Sanan Optoelectronics (600703:16.36, -0.15, ↓-0.91) and Qianzhao Optoelectronics (300102), which are upstream of the LED industry. According to the 2010 annual report, Sanan Optoelectronics achieved a chip sales of RMB 590 million in 2010, accounting for approximately 14.75% of the market share of approximately RMB 4 billion in the Chinese chip market in 2010. Its product gross margin reached 46.26%, and its own LED application products The gross profit rate is also as high as 40.28%, which is only about 16% of the gross profit margin of LED application product manufacturer Sunshine Lighting (600261:19.65, -0.09, -0.46), and Lianchuang Optoelectronics (600363:10.82, +0.02, ↑). 0.19) About 20% of the LED gross margins, Sanan Optoelectronics LED applications can be described as gross profit.
Dry photo optoelectronic LED chips and epitaxial wafers achieved a total revenue of 296 million yuan, accounting for approximately 7.4% of the 4 billion yuan market share of the Chinese chip market in 2010. The gross margin of their products is as high as 60%. And Ganzhao Optoelectronics will complete the production of most of its IPO fundraising projects in 2011. The expansion of production capacity may give Qianzhao Optoelectronics greater performance growth.
The domestic packaging giants, Hongli Optoelectronics (300219), Lehman Optoelectronics (300162), National Star Optoelectronics (002449) and other stocks, come from their annual gross margins (mainly from 2008 to 2010 three years). Look, with the increase of its packaging capacity and the increase of equipment utilization, it gradually highlights its advantages in economies of scale. The gross margin level can basically maintain a stable level, and there is a slight increase. With the expansion of new capacity of these packaging giants, it is also expected to usher in the release of performance.
Chinese LED companies may face patent crisis
According to reports, in China's LED industry, especially China's LED industry has gradually grown to reach an annual output value of 20 billion yuan, China's LED industry or will face the international giants of patent infringement litigation. It is reported that at present the international LED giants and many patents "anglers" have been collecting relevant evidence and are preparing to sue China's LED manufacturing enterprises for infringement. If they win the lawsuit, China's LED industry may suffer a major blow. Of course, it does not rule out the possibility of "reconciliation" with "patent-for-market".
Or affected by this news, on the 13th, the A-share market's LED sector index fell sharply 1.55% in early trading. In the late afternoon, non-ferrous metals, rare earth and other sectors under the strong lift, the LED plate index decline narrowed, fell 0.13% throughout the day . The whole day only Silan Micro (600460:16.69, +0.3, ↑1.83), National Star Optoelectronics (002449:23.91, +0.31, ↑1.31), Hongli Optoelectronics (300219), Ganzhao Optoelectronics (300102:30.35, +0.31, ↑1.03), Lehman Optoelectronics (300162:24.25, +0.13, ↑0.54) and other LED packaging stocks rose slightly, not exceeding 2%.
China's LED industry grows rapidly
LED, or light emitting diode, is a semiconductor device that can convert electrical energy into light energy. LED has the characteristics of energy saving, environmental protection, security, small size, long life, and rich colors, and is hailed as the third revolution of human lighting. It is expected that most of the traditional light sources will be replaced in the future.
At the beginning of the LED technology, due to the constraints of technical conditions and other factors, LED is only applied to the working status indication of home appliances, instrumentation, and consumer electronic products. After more than 40 years of development, the application of LED has gradually expanded to include Automobile taillights, outdoor variable signals, freeway intelligence signals, large outdoor display screens, and traffic lights, etc., are currently the most widely used high-brightness LEDs, accounting for more than 80% of the LED market. With the continuous expansion of the application scope, the global LED industry is developing rapidly. The high-brightness LED market alone is as high as US$8.25 billion (2009 figures). It is estimated that the global high-brightness LED market will reach more than US$20 billion in 2014. And more optimistic expectations that the global LED lighting in the next decade will have a market size of up to 10 trillion yuan (RMB).
The application of LED technology in China is basically in sync with the international, but the development of LED in China's industrialization is slower than that of the international LED industry. However, since 2000, the LED industry in China has been developing rapidly. As of 2009, China has a total of more than 3,000. Various types of LED manufacturers (including 25 epitaxial wafers and chip makers in the upper reaches of the LED industry, about 600 LED packaging companies, and about 2,500 applied production and processing companies), with an annual output value of 126 billion yuan (2010 data The output value of the epitaxial wafers and chips is about 4 billion yuan, the output value of the LED packaging is about 27 billion yuan, and the LED application is about 95 billion yuan, basically forming four major industrial clusters in the Pearl River Delta, Yangtze River Delta, Lancang Delta and the northern regions. The output value of the Pearl River Delta accounts for 35% of the country's total output value, the Yangtze River Delta accounts for 40%, the Handan Triangle accounts for 8%, and the northern region accounts for 5%.
With the continuous promotion of China's energy saving and emission reduction policies and the continuous implementation of LED energy saving and subsidy policies, China's LED industry will continue to grow and develop. It is estimated that China's LED market will reach 500 billion yuan in 2015, which is approximately four times the output value of about 126 billion yuan in 2010. This may mean the epitaxial wafer and chip manufacturing upstream of LED, and the LED packaging in the middle reaches. And downstream LED applications will achieve more than four times growth in the next five years.
Chinese LED industry may face industry reshuffle due to patent crisis
The tempting market prospect naturally leads to competing competitions of “good guysâ€. In this competition, China's LED industry may have become the "sacrifices" under the patent "sword knife" of the international LED giants because of lack of core technology, and the "sheep" that has grown up has become the "meat" of these giants.
According to research, China's LED industry has been developing very rapidly in the past decade or so, especially since China launched the "China Semiconductor Lighting Project" in 2003. The development of China's LED industry is very rapid. Facing the growing demand for LED applications in China and the unparalleled low-cost comparative advantages of China in the industrial manufacturing industry, China's LED packaging industry has developed very rapidly and has become the most widely distributed LED in the world. Packaging countries, accounting for 80% of the world's LED packaging capacity.
Rapidly growing LED packaging capacity has greatly stimulated the demand for epitaxial wafers and chips upstream of LEDs.
However, currently the design, technology, and production capacity of the epitaxial wafers and chips upstream of the LED in the world are basically dominated by Japan, Europe, America, and Taiwan. In 2010, Japan’s LED chip sales were approximately US$3.3 billion, which accounted for approximately 45% of global LED sales, about 30% in Taiwan, and approximately 20% in Europe and the United States. China's 2010 epitaxial wafer and chip output totaled about 4 billion yuan, but the localization rate is only about 49%. China's LED output value only accounts for about 8% of the global LED epitaxial wafer and chip market.
As the core of the LED industry chain epitaxial wafers and chips, China's localization rate is only about 49%, about 2 billion yuan, less than 4% of the global LED epitaxial wafer and chip market share, but China's LED packaging capacity accounted for More than 80% of the global LED packaging capacity. This also means that China's LED industry, especially the LED packaging industry, is highly dependent on the outside world. China's LED industry is largely due to the lack of sufficient core technology capacity to be in the "processing of materials." Low level of development. According to analysis, the entire LED industry, the upstream epitaxial wafers and chip makers earn 70% of the profits of the entire industry chain, the LED package of the middle reaches earn about 20% of profits, at the lowest end of the industry chain simple Applied production and processing companies only have 10% of profits. At present, China's LED industry is precisely the “flat triangle†with a wide base in the midstream and downstream. For LED packaging companies with a certain technical threshold in the midstream, the day is still “free,†but for the downstream Application-oriented production and processing companies can only get into helpless "price wars" on product application terminals.
It is precisely because of the status quo of China's LED industry that the international giants who hold the core technology of the upstream of the industry chain basically hold the “birth and death†of the development of this industry, and the patent is to implement this kind of “sports knifeâ€. ". Once international giants have “sold up†the “soldier knifeâ€, LED packaging enterprises and applied production and processing companies in the middle and lower reaches of the production relying on “processing of incoming materials†may have to withdraw from this market. This will prompt the whole industry to reshuffle, and the market share will also be concentrated on upstream companies with core technological advantages, and on packaging companies with economies of scale advantage.
"patent war" who is still unknown
However, it is clear that in the face of the Chinese government’s proposal in its 12th Five-Year Plan by 2015, China’s LED industry’s epitaxial wafers and chip localization rate will reach the goal of 70%, and it will also face Taiwan’s technological leadership due to cross-Strait issues. In terms of policy advantages and other competitive advantages, as well as the constant investment in Chinese LED epitaxial wafers and chip R&D and the continuous expansion of production capacity, it is clear that the LED international giants' calculations want to pass the “sacrifice†patent and the “Butcher†to “eat up†the Chinese LED. The "wishful thinking" of the market may not be very smooth. For these “late†“alien monksâ€, the ultimate goal may be to “change the market with patents.â€
Through patent authorization, LED packaging companies and various downstream application-type production and processing companies are controlled to establish their complete industrial chain system and gradually penetrate the LED market in China, especially the future LED lighting market. This may be the beginning of China's LED industry began "Warring States period."
For the current domestic LED companies, whether the upstream epitaxial wafers and chip manufacturers, the LED packaging manufacturers in the middle reaches or the downstream application processing manufacturers, will also face different opportunities.
If the international giants sacrificed their patents, they would undoubtedly increase the patent cost expenditure in the middle and lower reaches and gradually become the "door-to-doors" for these international giants. However, for the upstream epitaxial wafers and chip manufacturers, it also means that there will be opportunities to rapidly develop their own industrial chain system based on the advantages of lower cost localities. In particular, domestic LED giants that have been listed on the A-share market in recent years have rapidly expanded their production capacity through the capital market, or “strong alliances†or self-built systems, and gradually penetrated into the upstream, downstream, and terminal sales channels of the industry. Slowly established its own system. Therefore, "patent war" is not yet known.
Market outlook can be concerned about Sanan Optoelectronics and other stocks
As discussed above, attention can be given to Sanan Optoelectronics (600703:16.36, -0.15, ↓-0.91) and Qianzhao Optoelectronics (300102), which are upstream of the LED industry. According to the 2010 annual report, Sanan Optoelectronics achieved a chip sales of RMB 590 million in 2010, accounting for approximately 14.75% of the market share of approximately RMB 4 billion in the Chinese chip market in 2010. Its product gross margin reached 46.26%, and its own LED application products The gross profit rate is also as high as 40.28%, which is only about 16% of the gross profit margin of LED application product manufacturer Sunshine Lighting (600261:19.65, -0.09, -0.46), and Lianchuang Optoelectronics (600363:10.82, +0.02, ↑). 0.19) About 20% of the LED gross margins, Sanan Optoelectronics LED applications can be described as gross profit.
Dry photo optoelectronic LED chips and epitaxial wafers achieved a total revenue of 296 million yuan, accounting for approximately 7.4% of the 4 billion yuan market share of the Chinese chip market in 2010. The gross margin of their products is as high as 60%. And Ganzhao Optoelectronics will complete the production of most of its IPO fundraising projects in 2011. The expansion of production capacity may give Qianzhao Optoelectronics greater performance growth.
The domestic packaging giants, Hongli Optoelectronics (300219), Lehman Optoelectronics (300162), National Star Optoelectronics (002449) and other stocks, come from their annual gross margins (mainly from 2008 to 2010 three years). Look, with the increase of its packaging capacity and the increase of equipment utilization, it gradually highlights its advantages in economies of scale. The gross margin level can basically maintain a stable level, and there is a slight increase. With the expansion of new capacity of these packaging giants, it is also expected to usher in the release of performance.
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