China's LED idle capacity is still large in the second half of the development of state variables

The global economy has recently become more hazy, and the LED industry may not be prosperous during the peak season, causing Taiwan LED groups to tumble sharply yesterday (16th), Jingdian (2448), Dongbei (2499), Lunda (3698), and New Century (3383). Intraday hits the daily limit. Since July, LED industry orders are still full, but China's idle LED production capacity is still large, research institutions and foreign investors have become cautious about the demand outlook, LED seems to still have changes in the second half of the situation.

In June, the listed LED industry players handed over many good transcripts, including Jingdian, Yiguang (2393), Lunda, Dongbei (2499), and Haoyuan (3061), all of which have achieved growth for five months due to capacity utilization. Both are fully loaded, and there is room for the industry to adjust the product mix and the market estimates. Jingdian’s gross profit margin for the second quarter is 22%, and the single-quarter profit is 500 million yuan, which has the opportunity to smooth out the losses in the first quarter. The second quarter also has the opportunity to turn profit, and order visibility is also seen in September. The industry said: “Now look at the market situation and the end of June has not changed, I do not know why the stock price has turned sharply.”

Deputy General Manager Zhang Shixian of Jingdian stated that in July, the production capacity was still full, but some low-power and small-size products had a slightly weaker pull. Due to the poor gross profit of low-power products, there were still gaps in orders and shipments of high-power products. Therefore, Jingdian still has a margin to adjust its product mix and increase the proportion of high-power products, which is positive for gross margins. Yan Yuan also pointed out that the demand for backlight and lighting will be better than the second quarter in the third quarter, and there are no signs of improvement.

China's LED industry has previously purchased MOCVD machines in a big way. Recently, the market conditions have been slightly stable, and the production capacity has been gradually opened. Among them, China’s largest LED manufacturer, Sanan Optoelectronics, is the most active. China’s LED industry has pointed out that China’s low-power LED epistar market is the most important. Sanan Optoelectronics cuts into Taiwan's packaging customers. The industry pointed out that Sanan's price/performance ratio on low-power chips has gradually increased. The current price is about 10-20% lower than that of the Taiwanese factory. The relevant agencies believe that the demand in the terminal market in the second half of the year will be hit by the storm of European debt. It is not optimistic and may even face a crisis of no peak season. Foreign UBS Securities also observed that due to heightened risks in the broader environment, weak demand for panels in the third quarter has affected LED backlight applications. Although the situation in the third quarter of this year may not be as severe as in 2011, the overall LED community revenue in the second quarter In the same period of last year, growth was still negative, indicating that the LED recovery situation was indeed slower than expected.