Recently, Aoyang Shunchang said on the interactive platform that the price of LED chips has decreased compared with last year, and the related costs have also declined. Aoyang Shunchang is committed to the R&D, production and sales of LED chips. Huai'an Aoyang Shunchang's LED chips are highly recognized by the market for their stable performance and high cost performance.
In 2015, the price of LED chips in mainland China plummeted, accelerating the transfer of global LED wafer orders to China, which led to a sharp increase in orders from Chinese manufacturers in 2016 and the expansion of capital expenditures. Compared with the trend of other companies in the rest of the world to gradually reduce investment and even exit the LED industry, Chinese manufacturers are still the most active in the LED industry. In 2017, the main MOCVD equipment expansion is from Sanan Optoelectronics, Huacan Optoelectronics, Ganzhao Optoelectronics, etc. .
After this large expansion, the production capacity of several leading manufacturers will gradually cross the threshold of 1 million pieces per month, and the concentration of LED chip production capacity will be significantly improved. At present, the problem faced by LED chip manufacturers is that although the profit situation is good, the inventory quantity is rising sharply. Compared with last year, in 2018, the inventory of Sanan Optoelectronics, Huacan Optoelectronics and Crystal Power Chips increased to varying degrees.
In the past two quarters, Sanan's inventory level has surged by more than 900 million. Q4 has increased by 510 million. Q1 has increased its inventory by 430 million in a single quarter. Huacan Optoelectronics also faces an increase in inventory. In the first quarter of this year, Huacan Optoelectronics' inventory was about 780 million; Aoyang Shunchang also faced such a situation. At the end of the first quarter of this year, its inventory value was 871 million, a quarterly increase of 73 million. The root cause of this phenomenon is the successive opening of new capacity of mainland LED chip manufacturers, but the terminal demand has not synchronized rapidly.
In addition, the production capacity of the new capacity is higher than that of the previous generation machine, which can reduce the production cost by 30%, which will strengthen the cost competitiveness of leading manufacturers such as Sanan Optoelectronics, Huacan Optoelectronics, and Dry Photo Optoelectronics. The chip maker of the device will accelerate the marginalization. Coupled with the increase in the inventory level of several major chip manufacturers, this also increases the risk of falling chip prices.
In fact, since the fourth quarter of 2017, LED chip prices have begun to decline. As the two largest LED epitaxial wafer and chip manufacturers in China, Sanan Optoelectronics and Huacan Optoelectronics cut their LED chip prices by 20% in the fourth quarter of 2017; then, in the first quarter of 2018, LED chip prices continued to fall.
In this regard, Huacan Optoelectronics believes that the current chip as an industrial product, there will certainly be a decline, slightly decreased in the first quarter, but the magnitude is not large, probably fell by 2-3 percentage points, the price of the second quarter to the second half of 2018 The trend must be a steady decline.
On the investor interaction platform, Sanan Optoelectronics responded that “the price of LED chips has a landslide riskâ€, saying that the price of chips should be reduced every year because the cost is decreasing. Whether it is an active price cut or a passive price cut, the active price cut is an action based on the cost reduction.
The price of LED chips has ended a two-year stable and small upward trend. The price reduction of the chip for LED packaging manufacturers has also eased the cost pressure caused by the price cuts for two consecutive years.
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