LED localization trend shows good chip and backlight

The Taiwan Media Joint Evening News reported on the 21st that the mainland Ministry of Commerce had checked the monopoly in the morning and reported that the tariffs of the LED factory were raised. The current 4 was raised to 10. Due to this negative impact, the Taiwanese LED factory on the 21st suffered a total setback. Quotes, while the mainland LED sector rose. The tariff rumors are still to be further verified and there is no official accurate information. Earlier, the chairman of the National Committee of the Chinese People's Political Consultative Conference, Yu Zhengsheng, met with the Taiwan Industrial Association's mainland economic and trade delegation in Beijing. He said that Taiwanese businessmen have super national treatment in many parts of the mainland, and this part should be gradually cancelled. In the near future, a series of anti-monopoly incidents and the strong support of the semiconductor industry at the national level, the LED industry may also become the official support direction. If the future tariffs really improve, this will further limit the import of LED products to foreign countries and Taiwan, which will cause major impacts on Taiwan enterprises and protect domestic LED companies to a greater extent. Tariff rumors are only the trigger, and the trend of localization has long been determined. Regardless of whether the future tariff rumors are confirmed or falsified, it does not affect the big logic of LED industry investment. The shift of the LED industry chain to the mainland has long been an irresistible trend. First of all, the trend of the overall competitiveness of LED mainland enterprises surpassing Taiwan enterprises has been formed, which is more certain and longer-term than simple policy support. From the perspective of capital, technology, talents and market, Taiwan enterprises are gradually losing their advantages. In the future, mainland LED companies will replace the trend of Taiwanese companies. LEDs also belong to the electronics manufacturing industry, with emphasis on process innovation, cost control, scale effects and rapid response. There are several favorable factors for mainland companies to replace their counterparts in Taiwan: 1. Labor cost: The average salary of domestic technicians and middle and basic management personnel is much lower than that of Taiwanese. Adequate university graduates can enable domestic LED companies to continue to enjoy engineers in the future. dividend. 2. Industrial clusters and broad domestic demand market: China's LED industry cluster has been formed, has the most extensive lighting market demand, and concentrates most of the global packaging capacity, and enterprises have the advantage of rapid response. 3. Valuation difference: In the past few years, the high-level PE in the domestic secondary market electronics industry has provided sufficient and low-cost financial support for the expansion of domestic electronics companies' capacity, and also provided conditions for the industry's M&A integration. 4. Management Difference: The management of domestic LED enterprises is generally strong and prosperous, and they are more enterprising and more motivated. The localization replacement trend is the most favorable chip and backlight link. In the field of LED chips, the market share of Taiwan enterprises such as Jingdian, Yuyuan and New Century is still high, occupying a major market share. With the improvement of product quality and cost performance of mainland enterprises such as Sanan and Huacan, the future trend of Taiwan enterprises will be replaced. . In the large-size backlight field, Taiwan enterprises also occupy a major market share, but the competitiveness of mainland enterprises is constantly increasing. LED boom is high, optimistic about the long-term market of LED sector. From a global perspective, the LED industry continued to triumph in 2014, with a high degree of prosperity. Whether it is the international first-line lighting giants such as Philips and Osram, or the LED industry chain companies in Korea and Taiwan, they are optimistic about the LED lighting market and continue to increase investment. LED market prosperity depends mainly on three aspects, firstly the stabilization of the backlight market, followed by the large-scale start-up of public and commercial lighting, followed by the rapid increase in penetration of home lighting, and these three conditions are now Already available. This round of LED industry boom will continue throughout the year, and even continue to increase the penetration rate of LED home lighting in the next two or three years. In 2014, LED will be a year-round market. In the context of lighting volume and rapid demand growth, many companies will usher in revenue and profit margins and double turning points. Judging from the situation of industrial chain research, many LED companies have the demand for mergers and acquisitions and refinancing this year. Since the profit base of second- and third-line LED companies is generally not high, the corresponding performance elasticity is very large.

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