According to GLII monitoring, since the beginning of the year, the supply of chips has been tight, and since April, there has been an upward trend, especially for backlight chips and low-power chips. Backlight manufacturers are deeply troubled by shortages. The price of high-power chips remained stable, and the situation of continued price declines has been curbed. The price increase of small power chips is as high as 10-50%. Chip price increases are caused by a number of reasons, including strong demand, MOCVD out of stock, and sapphire out of stock.
The advance arrival of the large-size LCD LED backlight market and the rapid advancement of the LED lighting market have brought huge and unprecedented historical opportunities to the Chinese LED chip factory. LED manufacturers have expanded their production, LED downstream demand has increased, upstream epitaxial wafers, chip expansion capacity has not been fully released, and the tight supply of chips has led to the rise in LED chip prices.
In 2010, the global MOCVD shortage will reach 600 units. According to Veeco and Aixtron's plan, MOCVD will be out of stock in 2010. Ordering MOCVD in recent months requires queuing. The average delivery cycle of MOCVD is 6 months, and the commissioning time is 2 to 3 months. There are also talent training issues.
Sapphire materials began to appear tight at the beginning of the year, and prices have risen by about 20% since the beginning of the year. The current status of sapphire substrate companies is a small number, insufficient capacity, high key technology thresholds and yield problems to be improved. It takes about six months to nine months to expand the plant. Some chip companies have begun to shift some of their production to larger substrates, which is one of the reasons for the sapphire tension. The strong demand for sapphire substrates in the future will naturally drive the expansion of enterprises or new companies to join the industry, and will reach a new balance in the next two years.
The upstream core technologies and patents of LEDs are in the hands of a few large manufacturers. It is not excluded that MOCVD equipment manufacturers intend to cause such a shortage of supply. Their purpose is to monopolize the price of MOCVD equipment. Germany's Aixtron and the US Veeco two MOCVD equipment plants monopolize the market share of more than 90% of global MOCVD equipment.
GLII predicts that this price increase will continue in the second half of the year, especially in June-September, and from September to December, due to the official launch of some MOCVD, the price increase will be eased. Since the beginning of the year, Taiwan's chip factory has taken the lead in raising the price of green epitaxial wafers. Domestic chip companies such as Sanan, Huacan and Silan Mingxin all have signs of price increases.
In addition, the structure of the domestic LED industry chain is also the reason for the rise of domestic chip prices. Domestic LED epitaxial materials and chips are mainly in the middle and low range, and more than 80% of power LED chips and devices still need to rely on imports.
Different manufacturers have different reactions to this price increase. Cree Tang Guoqing said that the price of CREE chips remained stable. He believes that there will be more and more chips in the future, and the overall trend will be declining. Zhang Shixian, deputy general manager of Jingdian, pointed out that the average price increase of sapphire substrates in the second quarter was about 20%. They have already discussed the price increase related matters with customers.
Chen Jincai, chairman of Guangguang Optoelectronics Co., Ltd. said that it has raised the price of international customers by 5%-10% of the LED chips that Guangbiao shipped to Seoul Semiconductor. Ruifeng Optoelectronics Gong Weibin said, "The price of LED chips has risen by at least 10% recently. It is estimated that by the first quarter of next year, the shortage of LED chips will be difficult to alleviate." However, it is optimistic about the price increase of chips and believes that LED chips are out of stock. The situation will be greatly eased by the second quarter of next year.
Zhang Xiaofei, CEO of Gaogong LED, believes that the price of upstream chips has risen. Some companies that mainly use phosphors, brackets, and aluminum sheets have also followed suit, so that the cost of the simplest LED bulbs has increased a lot.
Based on the information of all parties, we believe that the price increase will continue until the second quarter of next year, and then there will be a continuous decline. The price increase of the chip is only a specific phenomenon in a specific historical period. The continued decline in chips after next year will continue. The historical trend has not changed fundamentally.
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