How big is the influence of China's LED market? You can feel the change in the stock price of a famous company.
The day before yesterday, Citigroup analyst Timothy Arcuri announced that the procurement subsidies for LED epitaxial wafer production equipment MOCVD by Chinese local governments may end in the first half of 2011. More than an hour later, the world’s second-largest supplier of MOCVD equipment, Veeco, began to plummet, eventually falling 15.57%, a drop of 30 constituents; and AIXTRON, the world’s largest supplier, fell 4.18%. .
MOCVD is a key equipment for LED production of epitaxial wafers (Editor's Note: Epitaxial wafers are commonly referred to as light-emitting chips, which are key products for the LED industry). The sum of Veeco and AIXTRON's global market share exceeds 90%. How can China's policy change be so powerful?
"First Financial Daily" has confirmed from relevant persons in the Yangzhou City government that the preferential policies since last year cannot be continued indefinitely. What effect will this produce?
Subsidy policy or changes in the first half of next year
AIXTRON and Veeco should thank China. At least in the past few years, they have not experienced such an astonishing situation. In the face of China’s LED boom, it’s almost a bit of a loss because the capacity is far from enough. Some equipment will have to be delayed until 2012.
Take a look at Veeco's third quarter earnings report. Its quarterly revenue reached 277 million U.S. dollars, a year-on-year increase of 180%, and it is expected that the fourth quarter will perform well in the first quarter of next year. The financial report showed that as of the end of the third quarter, it had accumulated 569 million U.S. dollars worth of orders. AIXTRON's performance was even stronger, with a year-on-year increase of over 200% in the second and third quarters. None of their financial reports mentioned that the outstanding performance was mainly due to orders from the Chinese market.
From this point of view, China's LED market policy has been troubled, so why not let them worry. "Policy can only play a supporting and catalytic role. Preferential policies always have a period of application. They will be cancelled on July 1 next year." Zhang Liansheng, deputy director of the Administrative Committee of Yangzhou Economic and Technological Development Zone, disclosed that after the implementation of the policy in 2009, it has attracted many people. Home companies, including BDO Runda, have landed about 40 MOCVD equipment and enjoyed subsidies.
Director Zhang also emphasized that as long as the registration is completed before July 1, next year, even after the equipment purchase plan is in place, policy preferences can be enjoyed.
The cancellation of the preferential policies will inevitably impact the subsequent enterprises and be directly transmitted to the upstream procurement of equipment, thus affecting the business of AIXTRON and Veeco.
Citigroup analyst Timothy Arcuri said that Veeco's customers should already be aware that the subsidy policy will expire and their orders will become cautious. According to his published data, in 2010, the installed capacity of MOCVD equipment in China was about 325 units. Currently, there are more than 200 units that are not yet installed, and the planned orders are enough to increase 525 units.
However, Gu Wenjun, a semiconductor research expert, said that under the investment thinking, the angle of local government's consideration of the issue is certainly different. He believes that Yangzhou's position means that a wave of new layout booms may be ushered in the first half of next year.
A salesman in AIXTRON China did not express his opinion and said only that the company’s global executives will come to China next month and should have important information disclosed.
And Veeco Chinese market sales people told the "First Financial Daily" that China's LED industry is currently only a start. Because LED products are now mainly used for flat panel displays, the "Ten City Ten Thousand" program is more like a demonstration project. Once the semiconductor lighting in home and public areas is widely used, the LED market capacity will be too large to be statistically significant.
However, the cancellation of the preferential subsidy policy will at least displease those opportunists. The vice president of corporate sales in a traditional industry in the Yangtze River Delta revealed to the newspaper a short time ago that the company must transform and prepare to develop the LED industry and plan to land in Yangzhou.
“We will not let any company come in. It needs at least industrial experience, technology and market background.†Zhang Liansheng said that before there was a shipbuilding company that wanted to enter the LED field under the name of transition, talked to them, and finally it was Rejected.
Local LED industry chain when self-improvement
In the past two years, the Chinese market has become a hot spot for the global LED industry. Many provinces are vigorously planning this industry and have issued many related policies.
This boom has started since the first half of last year. At the beginning of 2009, in order to expand domestic demand and reduce energy consumption, the country began to vigorously promote the development of the LED industry. The Ministry of Science and Technology launched the “Ten City Ten Thousand†LED lighting application demonstration city plan, which covers 21 cities including Beijing, Shanghai, Shenzhen, and Wuhan. Domestic developed cities. It has now entered the second stage.
The plan stimulated an upsurge in industrial planning. In addition to the above 21 cities, other provinces, second-tier and third-tier cities have also begun to compete for LED industry chain business opportunities, and issued a number of related preferential policies, involving the entire industry chain.
The initial subsidy was mainly directed at the product application level, especially the demonstration project. For example, according to the scale of application, Guangzhou City provides subsidies of 20% to 30% to schools, government, and industrial and commercial enterprises. Shenzhen will provide 10% of the lamp price subsidy to enterprises participating in government-funded LED demonstration projects, discount interest for 3 years, and subsidize 30% of LED lamp prices for demonstration projects undertaken by enterprises. In addition, more cities such as Wuhan, Xiamen, Ningbo, and Chongqing also set up special funds for LED promotion and application. Among them, 60 million yuan in Wuhan, 80 million yuan in the first batch in Xiamen, 20 million yuan in Ningbo each year, and 10 million yuan in Chongqing each year.
Yangtze River Delta LED town Yangzhou is mainly inclined to implement the equipment procurement policy for LED manufacturers. Last summer, it issued a subsidy for MOCVD purchases, claiming that the eligible blue-green MOCVD equipment procurement subsidy can reach 10 million yuan per unit, and red-yellow MOCVD subsidy funds can reach 8 million yuan per unit, but it is necessary to purchase 5 units at a time. or above.
Subsequently, the conditions of several cities such as Lugu Lake are almost identical, while Jiangmen has introduced a subsidy price of 12 million yuan.
A MOCVD device is between approximately $1 million and $3 million. According to the above criteria, government subsidies can account for 40% to 70% of total purchases.
The subsidy policy triggered the purchase of MOCVD equipment. Look at the lively Chinese market. On December 14, at the Asian Energy Forum (Guangzhou) in 2010, Wang Dianzheng, president of the Shenzhen LED Industry Federation, revealed that currently there are about 1,466 MOCVD devices planned to be imported by domestic manufacturers, which is equal to the total number of MOCVD in the world in 2006. As of the end of 2009, only 1,200 MOCVD plants have been put into operation worldwide.
This year, many companies have shown off how much equipment they plan to purchase. Sanan Optoelectronics stated publicly in August that it intended to purchase 107 units from Veeco and AIXTRON. At that time, it had paid 9 deposits. In the month, it received a partial subsidy of RMB 30 million for 9 sets of equipment in Wuhu City. In January this year, it has planned 12 billion yuan of LED industrial parks in Wuhu, including the purchase of 200 MOCVD. Hangzhou Silan Micro also received high government subsidies.
There is an embarrassing example. An industry company told this newspaper at the beginning of the year that it would buy 500 units this year, and so far it has only won four. When Zhang Jianjing founded Ruiying Optoelectronics in the summer, he said that the lack of MOCVD equipment is a major issue in the development of local LEDs.
Gu Wenjun said that although the LED market is huge, the layout of local governments and related companies is somewhat like the situation of semiconductor manufacturing industry a few years ago, and it is better to focus on “youâ€.
"Not only are MOCVD equipment out of stock, key materials are currently out of stock. The procurement boom shows that the local LED industry chain still lacks autonomy." Gu Wenjun reminded that if the layout is not rational, in the next 2 to 3 years, it will not rule out turbulence and adjustment. The semiconductor and panel industries have learned from the past.
The day before yesterday, Citigroup analyst Timothy Arcuri announced that the procurement subsidies for LED epitaxial wafer production equipment MOCVD by Chinese local governments may end in the first half of 2011. More than an hour later, the world’s second-largest supplier of MOCVD equipment, Veeco, began to plummet, eventually falling 15.57%, a drop of 30 constituents; and AIXTRON, the world’s largest supplier, fell 4.18%. .
MOCVD is a key equipment for LED production of epitaxial wafers (Editor's Note: Epitaxial wafers are commonly referred to as light-emitting chips, which are key products for the LED industry). The sum of Veeco and AIXTRON's global market share exceeds 90%. How can China's policy change be so powerful?
"First Financial Daily" has confirmed from relevant persons in the Yangzhou City government that the preferential policies since last year cannot be continued indefinitely. What effect will this produce?
Subsidy policy or changes in the first half of next year
AIXTRON and Veeco should thank China. At least in the past few years, they have not experienced such an astonishing situation. In the face of China’s LED boom, it’s almost a bit of a loss because the capacity is far from enough. Some equipment will have to be delayed until 2012.
Take a look at Veeco's third quarter earnings report. Its quarterly revenue reached 277 million U.S. dollars, a year-on-year increase of 180%, and it is expected that the fourth quarter will perform well in the first quarter of next year. The financial report showed that as of the end of the third quarter, it had accumulated 569 million U.S. dollars worth of orders. AIXTRON's performance was even stronger, with a year-on-year increase of over 200% in the second and third quarters. None of their financial reports mentioned that the outstanding performance was mainly due to orders from the Chinese market.
From this point of view, China's LED market policy has been troubled, so why not let them worry. "Policy can only play a supporting and catalytic role. Preferential policies always have a period of application. They will be cancelled on July 1 next year." Zhang Liansheng, deputy director of the Administrative Committee of Yangzhou Economic and Technological Development Zone, disclosed that after the implementation of the policy in 2009, it has attracted many people. Home companies, including BDO Runda, have landed about 40 MOCVD equipment and enjoyed subsidies.
Director Zhang also emphasized that as long as the registration is completed before July 1, next year, even after the equipment purchase plan is in place, policy preferences can be enjoyed.
The cancellation of the preferential policies will inevitably impact the subsequent enterprises and be directly transmitted to the upstream procurement of equipment, thus affecting the business of AIXTRON and Veeco.
Citigroup analyst Timothy Arcuri said that Veeco's customers should already be aware that the subsidy policy will expire and their orders will become cautious. According to his published data, in 2010, the installed capacity of MOCVD equipment in China was about 325 units. Currently, there are more than 200 units that are not yet installed, and the planned orders are enough to increase 525 units.
However, Gu Wenjun, a semiconductor research expert, said that under the investment thinking, the angle of local government's consideration of the issue is certainly different. He believes that Yangzhou's position means that a wave of new layout booms may be ushered in the first half of next year.
A salesman in AIXTRON China did not express his opinion and said only that the company’s global executives will come to China next month and should have important information disclosed.
And Veeco Chinese market sales people told the "First Financial Daily" that China's LED industry is currently only a start. Because LED products are now mainly used for flat panel displays, the "Ten City Ten Thousand" program is more like a demonstration project. Once the semiconductor lighting in home and public areas is widely used, the LED market capacity will be too large to be statistically significant.
However, the cancellation of the preferential subsidy policy will at least displease those opportunists. The vice president of corporate sales in a traditional industry in the Yangtze River Delta revealed to the newspaper a short time ago that the company must transform and prepare to develop the LED industry and plan to land in Yangzhou.
“We will not let any company come in. It needs at least industrial experience, technology and market background.†Zhang Liansheng said that before there was a shipbuilding company that wanted to enter the LED field under the name of transition, talked to them, and finally it was Rejected.
Local LED industry chain when self-improvement
In the past two years, the Chinese market has become a hot spot for the global LED industry. Many provinces are vigorously planning this industry and have issued many related policies.
This boom has started since the first half of last year. At the beginning of 2009, in order to expand domestic demand and reduce energy consumption, the country began to vigorously promote the development of the LED industry. The Ministry of Science and Technology launched the “Ten City Ten Thousand†LED lighting application demonstration city plan, which covers 21 cities including Beijing, Shanghai, Shenzhen, and Wuhan. Domestic developed cities. It has now entered the second stage.
The plan stimulated an upsurge in industrial planning. In addition to the above 21 cities, other provinces, second-tier and third-tier cities have also begun to compete for LED industry chain business opportunities, and issued a number of related preferential policies, involving the entire industry chain.
The initial subsidy was mainly directed at the product application level, especially the demonstration project. For example, according to the scale of application, Guangzhou City provides subsidies of 20% to 30% to schools, government, and industrial and commercial enterprises. Shenzhen will provide 10% of the lamp price subsidy to enterprises participating in government-funded LED demonstration projects, discount interest for 3 years, and subsidize 30% of LED lamp prices for demonstration projects undertaken by enterprises. In addition, more cities such as Wuhan, Xiamen, Ningbo, and Chongqing also set up special funds for LED promotion and application. Among them, 60 million yuan in Wuhan, 80 million yuan in the first batch in Xiamen, 20 million yuan in Ningbo each year, and 10 million yuan in Chongqing each year.
Yangtze River Delta LED town Yangzhou is mainly inclined to implement the equipment procurement policy for LED manufacturers. Last summer, it issued a subsidy for MOCVD purchases, claiming that the eligible blue-green MOCVD equipment procurement subsidy can reach 10 million yuan per unit, and red-yellow MOCVD subsidy funds can reach 8 million yuan per unit, but it is necessary to purchase 5 units at a time. or above.
Subsequently, the conditions of several cities such as Lugu Lake are almost identical, while Jiangmen has introduced a subsidy price of 12 million yuan.
A MOCVD device is between approximately $1 million and $3 million. According to the above criteria, government subsidies can account for 40% to 70% of total purchases.
The subsidy policy triggered the purchase of MOCVD equipment. Look at the lively Chinese market. On December 14, at the Asian Energy Forum (Guangzhou) in 2010, Wang Dianzheng, president of the Shenzhen LED Industry Federation, revealed that currently there are about 1,466 MOCVD devices planned to be imported by domestic manufacturers, which is equal to the total number of MOCVD in the world in 2006. As of the end of 2009, only 1,200 MOCVD plants have been put into operation worldwide.
This year, many companies have shown off how much equipment they plan to purchase. Sanan Optoelectronics stated publicly in August that it intended to purchase 107 units from Veeco and AIXTRON. At that time, it had paid 9 deposits. In the month, it received a partial subsidy of RMB 30 million for 9 sets of equipment in Wuhu City. In January this year, it has planned 12 billion yuan of LED industrial parks in Wuhu, including the purchase of 200 MOCVD. Hangzhou Silan Micro also received high government subsidies.
There is an embarrassing example. An industry company told this newspaper at the beginning of the year that it would buy 500 units this year, and so far it has only won four. When Zhang Jianjing founded Ruiying Optoelectronics in the summer, he said that the lack of MOCVD equipment is a major issue in the development of local LEDs.
Gu Wenjun said that although the LED market is huge, the layout of local governments and related companies is somewhat like the situation of semiconductor manufacturing industry a few years ago, and it is better to focus on “youâ€.
"Not only are MOCVD equipment out of stock, key materials are currently out of stock. The procurement boom shows that the local LED industry chain still lacks autonomy." Gu Wenjun reminded that if the layout is not rational, in the next 2 to 3 years, it will not rule out turbulence and adjustment. The semiconductor and panel industries have learned from the past.