analysis: falling prices to kill off half of chinese led chipmakers
HONG KONG (Reuters)- In China, for half the companies that produce LEDs, excess capacity and falling prices are ringing the knell (LED) The chips used in Samsung TV panels and sharp computer monitors are only large Support players may pass. Analysts said the global downturn in TV and computer sales could further reduce the price of LED chips by 20%, and integration or shutdown is the only option for smaller LED players in China. By contrast, Sanan optoelectronic Co. , Ltd. , China\'s largest manufacturer of LED chips, has a market value of $2. 8 billion, Electrical According to analysts, Technology International Limited will become one of the few large companies that will survive while continuing to receive government subsidies and incentives. \"This is China\'s strategy. Annie Lee, an analyst at Nomura Securities, said they wanted their biggest company to survive the restructuring. For most LED businesses, the government is slowly reducing incentives, including tax cuts, free land and more than $1. Buy LED chip 6 billion cash- The manufacturing of equipment has made the industry last for more than three years. Vipshop International in Shenzhen The headquarters department is competing with Apple for the iPad\'s trademark in China, and is trying to cope with the collapse of LED prices and fierce competition, these have dragged down the income of Hangzhou Silan micro-electronics company and other LED companies such as Foshan Guoxing optoelectronic. Hangzhou Si Lan fell 2. 9% to 10. Shanghai traded 10 yuan on Friday and Foshan fell 1% to 8. 10 yuan Shenzhen exchange. Shares have fallen by more than 30% in the past year. Many LED companies have 50% factory capacity in China, and up to half of the 700 chips Industry watchers say 2010 of machines were idle during the boom of 2009 when government funds were used to buy machines. Over the past year, overcapacity has closed hundreds of small Chinese LED lighting manufacturers, according to analysts. \"China\'s financial policy does not give enough support to mid. First-line and small businesses, \"said Bao Enzhong, executive vice chairman of Shenzhen Semiconductor Lighting Association, one of China\'s largest LED lighting production bases. \"We may see more factories shut down. \"Government subsidies helped China increase its global share of packaged LED components from 6% in 2010 to 2% last year, including chips, cabling and conductive paste. Sanan optoelectronic said that net profit more than doubled to 0. 936 billion yuan ($147. 52 million) In 2011, it benefited from government subsidies of about 1. Analysts say 8 billion yuan. Elec- Net income from technology tripledfold to 392. 3 million yuan. Large LED companies have nearly 2 billion yuan in cash and, despite the slow market, they are still increasing their capacity to better capture a larger share of the country Analysts say China plans to launch a supported LED lighting project this year. A report from UBS said Technology added 50 chips. Metal Organic Chemical Vapor Deposition (MOVCD) Tools for the production of LED chips could increase by 100 this year. Sanan also plans to buy more MOVCD tools, according to UBS. China\'s Ministry of Science and Technology said it plans to increase the output value of China\'s LED industry to 500 billion yuan ($79. 10 billion)by 2015. Analysts said the industry was valued at 31 billion yuan last year, and consolidation was crucial to boosting growth. The death of weaker companies is also a boon for larger states At a time when many Asian peers reported falling or losing profits, backed LED companies wanted to compete with regions such as Taiwan\'s Epistar Corp and South Korea\'s LG Innotek. NEAR- The broad cyclical decline in demand for LED chips in the long term outlook, and the fact that the market is still over-supplied by 50%, continues to drag down prices and profit margins. While LED chip orders grew seasonally at the beginning of this year, fundamentals remained weak. According to a UBS report, sales of LED companies in Taiwan fell to 3% in April from the previous month, after an increase of 12% in February. Taiwan LED companies account for about 19% of the global output of packaged LED chips. \"With the improvement of backlight technology, we will see a reduction in led usage in TV and display units, which will be a real demand issue,\" said Jerry Tsai, an analyst at HSBC . \". \"Coupled with a 20% drop in prices, you can imagine the downside that the industry will face next year. ” ($1 = 6. RMB 3447) Demo saves time and increases productivity because it's one of the most complete sources of business and contact information. Check out Demo Led Module for optimal quality products, and get your About Us problem fixed. Send us an enquiry or make a call if you are interested. The engineers and developers of Demo Photoelectric Technology (Wuxi) Co., Ltd. are the best in their own professional way and we guarantee to provide related service to our dear customers. The development of led light engine About Us products has massive potential for expansion.