Domestic LED chip manufacturers such as Sanan Optoelectronics, Hefei Blu-ray and Nantong Tongfang, which are rushing into the domestic LED TV backlight supply chain, may face more pressure. Because, the global LED chip giant Taiwan Jingyuan Optoelectronics is consolidating mainland color TV manufacturers with the establishment of a joint venture company in the mainland.
“The basic strategy for Jingdian to enter the mainland market is to find a partner that can release production capacity and include it as a shareholder of the joint venture company to form a win-win interest alliance.†Recently, Jing Bing Chairman Li Bingjie once again came from the wind Taiwan rushed to Shenzhen to attend the High-tech LED Engineers Conference. One of the goals was to find more LED professionals and cooperate with Crystal's mainland expansion blueprint.
On April 8th, Jingdian and Lite-On, a mainland power plant, invested $600 million in Jingzhou Optoelectronics in Changzhou. On October 8, Jingdian reached an agreement with Yiguanjing and Great Wall Development (000021, shares) (000021.SZ) to jointly invest 160 million US dollars in Xiamen to form a joint venture company.
"Next, there will be a joint venture company, which is currently under discussion. Jingdian plans to invest 30 billion Taiwan dollars (about 6.7 billion yuan) in the mainland for 5 years, and the first stage of the first three years will invest 15 billion yuan. Li Bingjie revealed that one of the shareholders of Jingpin Optoelectronics is a mainland color TV manufacturer. Since the cooperation still needs to be approved by relevant government departments in the mainland, it is estimated that all processes are expected to be completed in the near future. The establishment of a joint venture with Great Wall Development is also aimed at TPV Technology (00903.HK), a subsidiary of Great Wall Development's parent company China Electronic Information Industry Group (CEC). "TPV is the world's largest LCD TV foundry." Bingjie is talking about the third mainland investment project, one of which is also a color TV manufacturer on the mainland.
Li Bingjie said that the current investment in the LED industry in the mainland is frenzied, and there are many bubbles in the middle, because the LED production capacity that can be digested by the current lighting is very small, mainly LED TV. But this year, the global LED TV sales volume is only about 80 million units. The required LED chip capacity can only be met by 300-350 MOCVD equipment (LED chip production equipment), and more than 400 MOCVDs have been put into production this year. More than 500 units will be added next year. "So, in the investment projects of Jingdian in the mainland, it is necessary to find downstream customers before starting the expansion plan."
Despite the cautious expansion, Li Bingjie still feels the lack of manpower. Because, at present, the manpower of Jingdian can only meet the needs of Changzhou and Xiamen joint venture companies at most. As a result, last year, the company was founded by the Jingdian parent company in the joint venture established in Shandong, and the company could not send any reinforcements.
Based on this, Li Bingjie, a veteran of the LED industry, is also a bit stunned by the rising LED fever on the mainland. Li Bingjie pointed out that the mainland LED upstream enterprises represented by Sanan Optoelectronics basically tend to develop vertically in the industry, and the battle line is very long. From LED epitaxial wafers to LED packaging, to LED applications, "this kind of operation is difficult to have industrial partners. All of them are competitors. And it is impossible to have enough LED professionals to expand production."
Li Bingjie revealed that according to the investment plan of Jingdian, after the three joint venture projects were officially put into operation, only the LED lighting market was mature. At that time, Jingdian will implement the capital increase plan of NT$15 billion and introduce the mainland lighting manufacturers as shareholders.
According to reports, this year's crystal power revenue was NT$19.5 billion, of which more than RMB 4 billion was from the mainland market, and 30% of revenue came from LED TV backlights. In terms of revenue scale, Jingdian, together with its shareholder LED packaging giant Everlight (2393.TW), is the sum of revenues of other Taiwanese LED companies.
"The timing of mainland LED chip companies entering the TV backlight supply chain is a bit late," said Zhang Xiaofei, CEO of Gaogong LED. Gong Weibin, general manager of Ruifeng Optoelectronics, also admitted that Taiwan's LED giants will bind large mainland customers in a joint venture mode, so that mainland domestic LED upstream manufacturers can only become the second or third supplier of mainland color TV manufacturers.
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