The rise of mainland LED backlight packaging industry

The rise of mainland LED backlight packaging industry On August 6, Ruifeng Optoelectronic released the 2013 semi-annual report. The report shows that Ruifeng Optoelectronics 1H2013 operating income of 294 million yuan, an increase of 67%. Among them, the sales revenue of medium and large-sized backlight LEDs was 135 million yuan, a year-on-year increase of 113%, and the revenue of newly-added small and medium-size backlight LED business also exceeded 10 million yuan. As a representative manufacturer of large-size LED backlight packages on the mainland, Ruifeng Optoelectronics once again achieved high-speed growth.

On July 5, as a representative manufacturer of small-sized LED backlight packages on the mainland, Jufei Optoelectronic released 1H2013 performance forecast, and the net profit attributable to shareholders of listed companies increased by 25-55% year-on-year.

Backlight is still the largest application area of ​​LED. The global LED backlight packaging manufacturers mainly focus on Taiwan and Japan and South Korea. Due to the high threshold of LED backlight packaging technology, it is difficult for mainland manufacturers to intervene, especially in the field of large-size backlights. There are only a few packaging manufacturers in China capable of production, but the market share has been very small.

However, with the continuous improvement of technology in mainland enterprises, this trend has been greatly improved. The mainland LED backlight packaging industry has already shown its rising momentum in 2012. The performance of LED backlight package manufacturers represented by Ruifeng, Jufei, Zhaochi and Dongshan Precision increased significantly. In contrast, the performance of backlights was gradually eroded by Taiwanese manufacturers.

Mainland manufacturers LED backlight performance rose

In 2012, Ruifeng Optoelectronics had a total revenue of RMB 500 million, an increase of 72% year-on-year, of which revenue from LED backlighting devices was RMB 290 million, a year-on-year increase of 169%. Jufei Photoelectric LED backlight device revenue was 420 million, an increase of 37% year-on-year. Siu Chi shares and Dongshan Precision LED mainly produce LED backlight devices and modules, and their performance has doubled. In contrast to Taiwanese manufacturers, except for Dongbei, the revenues of other manufacturers have decreased.

Compared with previous years, the LED backlight packaging technology of mainland manufacturers has been greatly improved. Although the overall level is still a certain distance from Taiwan or international manufacturers, it has gradually been recognized by the downstream companies in the mainland. Especially for the small-size backlight of smart phones, the higher cost performance is favored by domestic second-line or even first-line mobile phone manufacturers. In addition, in the field of LED large-size backlights, according to LEDinside's survey, domestic TV manufacturers began to use domestically produced large-size backlight LED devices in about the second quarter of 2012. Among the six major TV manufacturers, Haixin did not adopt large-area LEDs for domestic production. Other manufacturers have already introduced LED backlighting devices from mainland packaging plants, and the application ratio has gradually increased.

The gap in product performance has continuously narrowed and manufacturing cost advantages have resulted in the continuous increase in the cost performance of LED backlight devices in the mainland, gradually replacing the market share of international manufacturers in Taiwan or Japan and South Korea. The market demand for LED backlighting is already approaching saturation, and there will not be more new markets each year. However, there are still opportunities for substitution for LED backlight package manufacturers in the Mainland. As can be seen from Figure 1, the overall revenue of mainland manufacturers is still far less than Taiwanese manufacturers, in addition to Japanese and South Korean manufacturers, the alternative market still has more room. Therefore, mainland LED packaging manufacturers have also expressed their desire to enter the field of LED backlighting or expand production capacity.

Land Plant Continues to Actively Expand LED Backlight Production Capacity

On July 16, 2013, Ruifeng Optoelectronics announced that it plans to jointly invest RMB 200 million with TCL Group, a wholly-owned subsidiary of Taiwan’s “Yuanyuan Optoelectronics,” in Zhongxin High-tech Development, Huizhou City, Guangdong Province. District established a joint venture of LED companies. The new company is called "Huarui Optoelectronics Technology (Huizhou) Co., Ltd." and its registered capital is 200 million yuan. Among them, TCL Group invested 102 million yuan, holding 51%; Ruifeng Optoelectronics invested 50 million yuan, 25% of the shares; Yuxing company invested 48 million yuan, 24% of shares. Fuyuan is a supplier of LED backlight chips, Ruifeng Electric is a manufacturer of LED backlight devices, and TCL is a consumer of LED backlight devices. It can be seen that LED backlight devices are one of the main businesses of Huarui Optoelectronics Technology (Huizhou) Co., Ltd.

In fact, at the beginning of July, Ruifeng Optoelectronics just announced that it plans to invest 183 million yuan of its own funds for the SMD LED expansion project, thereby further enhancing the company's overall strength in the LED packaging industry and consolidating and highlighting the company's size in the medium and large. LCD backlight LED, lighting LED market segment leader, which plans to increase the annual production capacity of LED backlight 504KK.

Dongshan Precision and Zhaochi have all expanded their LED backlight packaging production lines. Hongli Optoelectronics, Wanrun Technology, and Guangzhou Jinke have positioned LED backlight as one of the key development directions in the future. They have also been adding LED backlight package production lines.

Mainland China is the world's major production concentration base for TVs, mobile phones, and notebooks, and it is the main consumption base for LED backlight devices. The gap between the performance of LED backlight device manufacturers in the mainland and the Taiwan region and international manufacturers has continuously narrowed, and the price/price ratio has been continuously improved. It will be an irreversible trend for mainland LED backlight package manufacturers to replace Taiwan or international manufacturers in the future. For manufacturers such as Japan and South Korea, there will still be a certain market under patent protection. For Taiwanese LED backlight packaging manufacturers, the upstream is equivalent to the land plant resources, while the downstream is lacking brand outlets. If it does not change, it will Will be in a passive situation.

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