In recent years, there have been two obvious trends in the new pattern of the LED chip industry. The first trend is the shift in capacity to mainland China. With the technology gap between domestic technology and international big manufacturers getting smaller and smaller, due to factors such as production costs, and the active promotion of domestic government policies, foreign companies are slowing down their production expansion, and even some enterprises are gradually shrinking their production capacity. The domestic LED chip production capacity is getting higher and higher. In the long run, the domestic LED chip market is bound to continue to expand. The second trend is the increasing concentration of LED chip manufacturing industry.
Chinese LED chip market continues to grow in size
Chinese LED industry started from the beginning of packaging. The initial chip mainly relies on imports. In recent years, with the strong demand from the downstream and the support of local policies, the major domestic LED epitaxial chip companies have increased investment in R&D and actively developed expansion plans. The investment in the chip segment has been continuously improved, which has accelerated the development of the domestic LED epitaxial chip industry.
With the increase in production capacity of mainland China manufacturers and the gap between technology and Taiwan, the scale of China's LED chip market has increased year by year since 2013. The data shows that in 2017, the market size of China's LED chips (excluding Taiwan) reached 18.9 billion yuan, an increase of 48.8% compared with 2016, accounting for 37.1% of the global LED chip output value.
LED chip industry initially formed five major gathering areas
After several years of development, Chinese LED chip industry has initially formed five major industrial clusters with the Yangtze River Delta, the Pearl River Delta, the Northern Region, Fujian's Jiangxi region and other southern regions. For the time being, the Yangtze River Delta region is the main production base for LED chips in China. At present, the largest number of LED chip companies are put into production, and the output value is the largest; from the perspective of future industrial planning, the Yangtze River Delta region is also the region with the largest planned production capacity. Statistics show that the Yangtze River Delta region will plan to introduce 1,209 MOCVD in the future, ranking first in the five regions.
With the technology gap between domestic technology and international big manufacturers getting smaller and smaller, and the active promotion of domestic government policies, foreign companies are slowing down the pace of expansion, and even some companies are gradually shrinking production capacity, and domestic LED chip production capacity is getting higher and higher. In the long run, the domestic LED chip market is bound to continue to expand.