The growth rate of LED chip production capacity in 2019 is higher than the growth rate of demand
Generally speaking, the market demand growth rate in 2018 is far below the growth rate of production capacity, prices have fallen, and business growth has not increased revenue. In 2019, on the demand side, affected by the global economic downturn and Sino-US trade friction, it is not optimistic; on the supply side, expansion projects continue to increase, and the problem of overcapacity will continue.
According to statistics, it is expected that the production capacity of LED chips will still increase by 1.4 million pieces/month (equivalent to 2 inches) in 2019. At present, manufacturers’ inventories are already at a high level. With the release of new capacity in 2019, the chip market price is expected to continue to increase. Continue to fall.
LED packaging market demand is not optimistic
According to the statistics of LEDinside, the LED packaging market in Mainland China was RMB 69.7 billion in 2018, a year-on-year increase of 6%. Starting from the second half of 2018, due to Sino-US trade frictions, LED lighting exports will be greatly affected, and the impact will be difficult to eliminate in the short term. Therefore, the market demand in 2019 is still not optimistic. The internal demand of the mainland domestic market will be the main driving force for growth, including automotive LED, high-end commercial lighting, high-end backlight and display markets.
From the perspective of product categories, lighting is still the application of LED*, accounting for 49% in 2018. Traditional display and traditional backlight markets still occupy a large proportion, but the future growth scale is very limited. New Mini LED backlights may Mini RGB is expected to become a new growth driver in the future, but the current market acceptance is still low. The automotive lighting market is a market worthy of attention in the next two to three years*. The rise of domestically-produced vehicles and new energy vehicles will form a new supply system, and the originally relatively closed automotive supply chain is expected to be broken. It is an opportunity for new entrants in the Taiwan or mainland market.
From the supply side, mainland manufacturers are still the main supply camp, with a market share of 70% in 2018, but the increase in the proportion is not obvious. The main reason is that the high-end automotive, high-end backlight and lighting markets are still dominated by international manufacturers In 2018, the revenue of international manufacturers in the mainland market still maintained a 4% growth. The revenue of domestic mainland manufacturers in 2018 was 48.8 billion, a year-on-year increase of 7%. The first-tier manufacturers, including Mulinsen, National Star, Hongli and Jufei, have maintained rapid revenue growth.
Three major development trends in the LED lighting market
According to the forecast of the Prospective Industry Research Institute: In the future, with the continuous development of lighting energy-saving technology, the protagonist of the traditional lighting market is changing Widely used, smart cities have become an inevitable trend. In addition, from the perspective of market demand, emerging areas such as Southeast Asia and the Middle East* have strong demand. Forward-looking forecasts, the future global LED lighting market will present three major development trends: smart lighting, niche lighting, and emerging* lighting.
Development Trend 1: Smart Lighting
With the maturity of technology and products and the popularization of related concepts, it is estimated that the global smart lighting will reach 13.4 billion U.S. dollars in 2020. Industry and commerce are the application fields of smart lighting*. Because of the characteristics of digitalization, smart lighting will bring more new business models and value growth points to these two fields.
Development Trend Two: Niche Lighting
Four niche lighting markets, including plant lighting, medical lighting, fishery lighting and marine port lighting. Among them, the U.S. and Chinese markets are rapidly increasing the demand for plant lighting, and the construction of plant factories and the demand for greenhouse lighting are the main driving forces.
The third trend of development: emerging*lighting
Emerging* economic development drives infrastructure construction and the increase in urbanization rates. Large-scale commercial facilities and the construction of infrastructure and industrial zones stimulate the demand for LED lighting. In addition, various government and local governments’ energy-saving and emission-reduction policies such as energy subsidies, tax incentives, etc., large-scale bidding projects such as street lamp replacement, residential and commercial district renovation, and the improvement of lighting product standard certification are all promoting the promotion of LED lighting. . Among them, the Vietnam market and the Indian market in Southeast Asia are growing* rapidly.
In 2019, the output value of LED vehicles in China exceeded US$1 billion
According to LEDinside's forecast, as China-US trade negotiations continue in 2019, coupled with the continuous increase in China’s demand for automobiles, the output value of China’s automotive LEDs will grow steadily, and the year-on-year growth rate in 2019 will exceed 20%, much higher than the global value. It is estimated that the output value of China's automotive LEDs will exceed 1 billion US dollars in 2019.
In terms of power, in the high-power part, with the decline in the price of headlamp LEDs and the increase in the diversity of the headlamp front-mounted market, the high-power output value has shown a very rapid growth. YOY basically It can reach about 35%. In addition, because many models now like to match rear-view mirror turn signals and the introduction of LED daytime running lights, the growth of medium-power LEDs is also relatively rapid, and the year-on-year growth rate will probably be about 20%. In contrast, low-power LEDs (less than 0.5W) have relatively limited growth space.
In terms of the output value of different car light applications, the output value of headlights is undoubtedly the highest, and the proportion is also continuing to rise, accounting for 43% in 2018, and it is expected to grow to 49%, in addition to the increase in the diversity of the pre-installation market, including many international manufacturers or Chinese manufacturers launching monocrystalline or polycrystalline products for low beams; in the after-installation market, because the price of high-power LEDs has fallen relatively rapidly, Therefore, the demand is also showing a rapid increase.
In addition, the output value of automotive panels has grown faster, but because the output value* of panels is relatively low, the ratio is not too obvious. In recent years, many interior panel manufacturers have continued to increase their production capacity, which has led to a rapid increase in the cost-effectiveness of interior panels. In addition, car panels are a product that can effectively improve the specifications of the car at a limited cost price, so many manufacturers are willing to increase the number of installations and the size of the car.
In terms of the LED penetration rate of traditional Chinese passenger cars, the current penetration rate of rear taillights is relatively high, including high-position brake lights and rear combination taillights, with a penetration rate of 70% or even 80%. It is worth noting that daytime running lights and panels. Many Chinese brands regard daytime running lights as a symbol of improving the grade of vehicles. Therefore, the willingness to introduce them is relatively strong. The LED penetration rate of daytime running lights is expected to reach 50% in 2019. In addition, the LED penetration rate of the panel is also growing very rapidly, and it is estimated that it will be close to about 40% in 2019.
In recent years, although international LED manufacturers still occupy a monopoly position in the automotive market, manufacturers in mainland China and Taiwan have gradually made breakthroughs in the supply chain, as well as technological improvements, which are slowly being divided up. Installed market share. Now we can see that some manufacturers cut into the front-mounted supply chain of taillights and even a small proportion of daytime running lights. Therefore, in the next few years, Chinese LED manufacturers are expected to cut into the local brand vehicle supply chain and gradually gain a firm foothold in the pre-installation market.
small spacing display development trend
According to research, the indoor small-pitch (≤P2.5) market size in 2018 is about 1.997 billion U.S. dollars, with an annual growth rate of 39%, mainly due to the continued fermentation of the future ultra-fine-pitch trend. It is estimated that 2018 ~2022 CAGR will reach 28%.
is divided according to the dot pitch of LED small pitch display. In 2018, the global LED small pitch * revenue accounted for the pitch has reached P1.2~P1.6, accounting for about 39%. As consumers show With the gradual increase in performance requirements and the further decline in costs, products with P1.2~P1.6 and smaller pitches below P1.1 will have the highest growth momentum in the next few years. The CAGR is estimated to reach 32% from 2018 to 2022. And 62%.
In recent years, with the development of ultra-fine pitch display technologies such as Mini/Micro LED, the market structure is slowly changing. In the field of ultra-fine pitch (≤P1.0) display, domestic and foreign display manufacturers have successively Introduced products with a pitch of P0.7~P0.9, and actively deployed the ultra-fine pitch display field. Even many traditional panel manufacturers have actively participated in the "competition for the right to speak in the future" business battle, and they have adopted capital and technology. Develop and launch related products and expand channels to seize the market.
is divided according to the application scenarios of LED small-pitch display, which can be roughly divided into six categories: broadcasting applications, security monitoring, corporate and education, retail, public areas and transportation, hotels and theaters. From the perspective of proportion, the current applications of LED small-pitch displays* come from enterprises and education, accounting for about 39%, followed by commercial retail, accounting for 19%; from the perspective of future growth rates, as commercial displays gradually mature , The improvement of cost performance, it is estimated that these two markets are also the application areas with the most room for growth.
