According to related news, as many Chinese LED epitaxial wafer and chip manufacturers have expanded or are expanding their production capacity, it is expected that several major Chinese listed manufacturers will account for 70% of global LED chip production in the next three to five years.
According to the 13th Five-Year Plan, the total output value of China's LED lighting in 2020 is 1.0 trillion yuan (about 153 billion US dollars), and LED lighting accounts for 70% of the total sales of lighting products. It is reported that the output value of China's LED lighting has increased from 7.8 billion yuan in 2009 to 255 billion yuan in 2017, with an average compound annual growth rate of 54.62%.
After receiving the investment of Hejun Capital in December 2016, Xiamen Ganzhao Optoelectronics adjusted the enterprise structure, upgraded the red and yellow LED chip technology and expanded the production capacity of blue-green LED chips. In May 2017, Ganzhao Optoelectronics invested RMB 737 million and purchased 20 MOCVD equipment for the production of red and yellow LED chips. At present, it has become China's largest manufacturer of red and yellow LED chips, accounting for more than 30% of China's total output, accounting for about 11% of global production. For the blue-green LED chip, Ganzhao Optoelectronics began to expand its production capacity in the Nanchang plant in central China in July 2017 with a total investment of RMB 5 billion. The plant's additional capacity is 1.2-1.6 million epitaxial wafers per month, with initial monthly capacity of 600,000-800,000 epitaxial wafers, and is gradually in production starting in August 2018. In addition, dry photo optoelectronics has begun producing infrared LED chips at its plant in Yangzhou, eastern China.
The expansion of China's LED chip makers' capacity has triggered industry concerns about oversupply. In this context, Jin Zhangyu, president of Xiamen Ganzhao Optoelectronics, said that relatively small-scale Chinese manufacturers will be forced to withdraw from the market, which will alleviate the possible oversupply situation.