Investment in emerging applications is growing, and enthusiasm for industrial investment is high

In 2021, many emerging fields of the LED industry will enter the stage of rapid industrialization, and product performance will continue to be optimized.

Among them, the photoelectric conversion efficiency of UVC LED has exceeded 5.6%, and it has entered the large space air sterilization, dynamic water sterilization, and complex surface sterilization markets;

With the development of advanced technologies such as smart headlights, through-type taillights, HDR car displays, and ambient lights, the penetration rate of automotive LEDs continues to rise, and the growth of the automotive LED market is expected to exceed 10% in 2021;

The legalization of the cultivation of special economic crops in North America stimulates the popularization of LED plant lighting. The market expects that the annual growth rate of the LED plant lighting market will reach 30% in 2021.

At present, the small-pitch LED display technology has been recognized by mainstream machine manufacturers and has entered a rapid mass production development channel. On the one hand, complete machine manufacturers such as Apple, Samsung, and Huawei have expanded their Mini LED backlight product lines, and TV manufacturers such as TCL, LG, and Konka have intensively released high-end Mini LED backlight TVs.

On the other hand, active light-emitting Mini LED panels have also entered the stage of mass production. In May 2021, BOE announced the mass production of a new generation of glass-based active Mini LED panels, which have the advantages of ultra-high brightness, contrast, color gamut, and seamless splicing.

In 2021, leading companies and local governments are enthusiastic about investing in the LED industry. Among them, in the downstream terminal field, in May 2021, China has invested 6.5 billion yuan to build a Mini LED display industrial park, and the output value is expected to exceed 10 billion yuan after completion; in the midstream packaging field, in January 2021, China plans to invest 5.1 billion yuan to build 3500 A small-pitch LED production line, with an estimated annual output value of more than 10 billion yuan after reaching production. It is estimated that in 2021, the new investment in the whole Mini/Micro LED industry chain will exceed 50 billion yuan.

Looking forward to 2022, due to the decline in the profits of LED traditional lighting applications, it is expected that more companies will turn to LED display, automotive LED, UV LED and other application fields.

In 2022, the new investment in the LED industry is expected to maintain the current scale, but due to the preliminary formation of the competition pattern in the LED display field, it is expected that the new investment will decline to some extent.

II. Several issues that need attention

Overcapacity accelerates consolidation within the industry

The rapid growth of domestic LED output value has also brought about overcapacity in the industry as a whole. The overcapacity further accelerates the integration and de-capacity in the industry, and promotes the growth and development of the LED industry in the fluctuation.

In 2021, the global LED industry's willingness to invest will decline as a whole under the new crown pneumonia epidemic. Under the background of Sino-US trade friction and the appreciation of the RMB exchange rate, the automation process of LED enterprises has accelerated and the industry's intensive integration has become a new trend.

With the gradual emergence of overcapacity and thinning profits in the LED industry, international LED manufacturers have frequently integrated and withdrawn in recent years, and the survival pressure of my country's leading LED enterprises has further increased. Although my country's LED enterprises have recovered their exports due to the transfer substitution effect, in the long run, it is inevitable that my country's export substitution to other countries will weaken, and the domestic LED industry is still facing the dilemma of overcapacity.

 

Rising raw material prices lead to price fluctuations

In 2021, the prices of products in the LED industry will continue to rise. Relevant domestic and foreign companies such as GE Current, Universal Lighting Technologies (ULT), Leyard, Unilumin Technology, Mulinsen, etc. have raised product prices many times, with an average increase of about 5%, of which the price of very few products in short supply has increased by as much as 30%. The fundamental reason is that the price of LED products fluctuates due to rising raw material prices.

Whether it is lighting or display areas, the trend of rising prices will not subside in the short term. However, from the perspective of the long-term development of the industry, rising prices will help manufacturers optimize and upgrade their product structure and increase product value.

There are more repetitive investments in emerging fields

Due to the relatively scattered distribution of LED industry investment across the country, there is a problem of repetitive investment in emerging fields.

There is uncertainty about the influx of various types of social capital, guiding funds and industrial funds into this field. To solve these problems, not only professional investment is needed to lead and drive the linkage between upstream and downstream industries, but also key links are required. Make up for shortcomings.

III. Suggestions for countermeasures to be taken

Coordinate the development of industries in various regions and guide major projects

The National Development and Reform Commission, the Ministry of Industry and Information Technology and other management departments need to coordinate the development of the LED industry in various places, explore the "window guidance" mechanism for major LED projects, and promote the adjustment of the LED industry structure. Encourage the transformation of LED chip substrate manufacturing and packaging production lines, moderately reduce support for traditional LED lighting projects, and encourage the upgrading and localization of LED equipment and materials. Support domestic leading LED companies to carry out technical and talent cooperation with companies in advanced regions such as Europe and the United States, and encourage major production line projects to settle in major industrial clusters.

Encourage joint innovation and R&D to form advantages in emerging fields

Utilize existing funding channels to specially improve the supply chain construction in emerging areas of the LED industry. The chip substrate link focuses on improving the performance of ultra-high-definition Mini/Micro LED and deep UV LED chips; the packaging link focuses on improving advanced packaging processes such as vertical and flip-chip packaging and reducing manufacturing costs; the application link focuses on developing smart lighting, healthy lighting, plants Lighting and other market segments pilot demonstration projects to accelerate the formation of industry group standards; for materials and equipment, cooperate with integrated circuit companies to improve the localization level of high-end LED equipment and materials.

Strengthen industry price supervision and expand product export channels

Cooperate with integrated circuit companies to build a semiconductor chip price monitoring system, strengthen the supervision of the LED market, and speed up the investigation and punishment of illegal acts of driving up the prices of LED chips and materials according to the clues reported. Encourage the construction of domestic LED industry organizations, build a public service platform covering standards, testing, intellectual property rights, etc., concentrate superior resources, help enterprises strengthen international exchanges and cooperation, and expand export channels for products in overseas markets.