China SMD LED Enterprise and Market Analysis

SMD LED is a new type of surface mount semiconductor light-emitting device, which has the advantages of small volume, large scattering angle, good uniformity of illumination, high reliability, and various colors including white light. Therefore, it is widely used in various electronic products.

With the market's good expectations for the future status of SMD LEDs, major mainstream manufacturers have launched their own SMD LED development plans and prototype products. For a time, the SMD LED market has presented a thriving and prosperous atmosphere.

Unexpectedly, the market share of SMD LEDs in the past few years has only accounted for a small portion of China's LED packaging industry. In 2007, sales were only 10% to 15%. In the past five years, when the output and sales of the entire LED industry increased by 30% and 20% respectively, the growth of SMD LED industry is still very slow compared to the whole industry. In 2008, SMD LED revenue increased by only 5% to 10 %.

However, with the changes in independent innovation and business strategies of major manufacturers in China, by 2009, China had 153 MOCVD equipment, and the output of chips increased by 25% compared with 2008, reaching 2.3 billion yuan, and the package reached 20.4 billion yuan. Power LEDs and SMD LEDs are growing faster. In 2010, it is expected to increase to 28 billion yuan. In terms of the application market, the output value of China's LED application products in 2009 has exceeded 60 billion yuan.

Suppliers are also rethinking business strategies. Some companies are considering delaying expansion plans, some have stopped investing in new production lines, or are in the process of verifying orders with buyers in alternative markets to determine if further capacity expansion is needed. In 2009, many manufacturers began to reduce product prices while opening up new markets. In addition to controlling investment, suppliers also want to better control production costs.

1. SMD LED Product Analysis

Product advantages

SMD LEDs have many unique features compared to other packaged devices:

a. High assembly density, small size and light weight of electronic products. The volume and weight of the chip components are only about 1/10 of that of conventional plug-in components. After SMT is generally used, the volume of electronic products is reduced by 40% to 60%, and the weight is reduced by 60. %~80%.

b. High reliability and strong anti-vibration ability. The solder joint defect rate is low.

c. High frequency characteristics are good. Reduced electromagnetic and radio frequency interference.

d. Easy to automate and improve production efficiency. Reduce costs by 30% to 50%. Save materials, energy, equipment, manpower, time, etc.

Applications

Currently, SMD LEDs are used primarily in lighting systems, decorative, electronic device indicators, backlights, displays and instruments. In 2009, lower production of mobile phones and LCD TVs may affect the supply expectations of such components. The package sizes for conventional monochrome SMD LEDs are 1206 (3215), 1004 (2510), 0805 (2012), and 0603 (1608). Chinese manufacturers can provide a minimum size of 0603 and a thickness of only 0.3 mm. Smaller LEDs with a size of 0402 (1005) are still in trial production. In addition, Chinese suppliers offer both mature and low-margin two- and three-color products for backlights, devices, household products, consumer electronics and displays. Despite the low market demand, manufacturers continue to offer sideview SMD LEDs, including 335 (4008), 020 (3806) and 215 (2810) models.

product price

In terms of price, due to the continuous decline in production costs, in 2009, many manufacturers began to reduce product prices while opening up new markets. In addition to controlling investment, suppliers also want to better control production costs. Manufacturers expect that the price of traditional SMD LEDs will be reduced by 10% to 20% in the next few months, TOP-type LEDs will be lowered by 30% to 50%, and high-end products will also be reduced by 50%.

The brightness value is also an important factor affecting the price. Traditional SMD, TOP or high power TOP LEDs are available in red, green, blue and white. The price of the white 0603 LED is 0.03 to 0.07 US dollars, the price of the blue 0603 LED is 0.01 to 0.02 US dollars, and the price of the red and yellow 0603 LED is less than 0.01 US dollars. Even if the normal TOP type LED and the conventional SMD LED have the same specifications, the price of the former is usually higher than the latter by 0,01 to 0,03 dollars. The standard 3528 white LED starts at $0.06, the 0.5-watt high-power TOP LED is priced at $0.20 to $0.80, and the 1-watt price is $1.30 to $1.80.

2. Analysis of the current situation of domestic supply and demand

Diversified customer needs

As the fierce competition in the market continues to intensify, customers are increasingly demanding LED products, and domestic suppliers are constantly improving product performance to meet customer needs. First of all, the customer's requirements for the color and brightness of the product are getting higher and higher, requiring an overall uniformity of color and brightness. "The uniformity of the product is affected by many parameters, such as voltage, light length and wavelength. By controlling these three parameters, the overall uniformity of the product can be guaranteed." Gong Weibin, general manager of Ruifeng Optoelectronics pointed out that "these parameters are mainly relied on Production equipment to ensure that." At present, domestic manufacturers such as Foshan Guoxing, Shenzhen Ruifeng and other production equipment are mostly imported from abroad, mainly Japanese equipment.

Second, customers' requirements for color consistency are becoming more stringent, which is controlled by maintaining consistency of technical parameters. In the case of blue LEDs, there are dark blue and light blue. Previously, customers have checked by visual inspection. Now many customers are using equipment inspection. Suppliers control color consistency by controlling the source of the material and the source of the chip. The consistency of product color can provide manufacturers with the convenience of product design and ensure the interchangeability of the device.

Supplier: The sparrow is small and complete

The SMD LED market in mainland China was almost completely occupied by suppliers in the US, Japan, South Korea and Taiwan a few years ago. Although foreign manufacturers still occupy most of the market share, since the SMD LED products of Foshan Guoxing Optoelectronics Technology Co., Ltd. have been put into production in 2000, local Chinese suppliers have mushroomed. Now, the industry has grown to have 20 to 30 suppliers, most of which are concentrated in Shenzhen, Dongguan, Guangzhou and Foshan in Guangdong. A few companies are located in Jiangsu, Zhejiang and Fujian. Leading companies in the industry include Foshan Guoxing Optoelectronics, Guangdong Hongli Optoelectronics, Shenzhen Ruifeng Optoelectronics, Jiangsu Wenrun Optoelectronics and Jiaguang Electronics.

The production time of China's local chip LED products is relatively short. Compared with foreign big-name manufacturers, there is still a big gap in terms of financial strength. This will bring certain problems to the capacity increase of local enterprises, limit the investment of enterprises to the equipment and thus limit the scale of the enterprise, resulting in reduced scale efficiency. At present, it is difficult for local companies to obtain large-volume orders, and even if they get large orders, they cannot complete them.

However, compared with large foreign companies, small companies also have their own advantages, and their response is relatively fast, able to provide customers with professional customized services. For mobile phone products, the life cycle of new models is up to half a year, the cycle of new product development is very short, and the design changes are also many. It is difficult for foreign manufacturers to meet the customization needs of some customers.

And the local manufacturers' product lines are quite complete. For example, most of Ruifeng Optoelectronics' products are used in high-end products such as mobile phones, PDA button switches, backlights, car audio, instrumentation indicators, etc. The product types include the current mainstream 0603, 0805 and 1206 models. And the focus is on the field of full color products. The main product specifications of Guoxing Optoelectronics also include 0603, 0805, 1206 and 1104. The color is also very rich, but mainly based on blue light, suitable for mobile phone and home appliance applications.

3. Future development direction and investment prospect analysis

Product trend: smaller and thinner

With the continuous miniaturization of mobile phones and the increasing number of embedded function modules in mobile phones, chip LEDs are also moving in a smaller and thinner direction. At present, the thinnest product on the market is only 0.35mm thick, and the product of Guoxing Optoelectronics can reach 0.4mm. Lei Zihe, assistant general manager of Guoxing Optoelectronics, stressed: "In the future, a large number of ultra-thin LED products of 0.4mm will be used in mobile phones. The current mainstream model is 0603, and smaller products of 0402 are also on the market."

Some manufacturers have also introduced SMD LEDs with a metal frame structure (Lead Frame). Hu Bin of Hongqi Technology Co., Ltd. pointed out that the structure of the metal backplane package has better antistatic strength, better moisture resistance and higher gain on brightness. Currently in the field of mobile phones and PDAs, both TOP LED and Lead Frame technologies are used.

Supplier: R & D capability continues to improve, the industry chain has become perfect

At the same time, we also see that domestic suppliers are constantly improving and trying to do better. They pay great attention to the development of new products and constantly introduce new products. Fang Zhilie, a professor at Fudan University, said recently that from the technical indicators completed in previous years, the development of semiconductor lighting technology is much faster than originally planned. The luminous efficiency Ф5 LED has reached 2491m/W, the power LED has reached 208lm/W, and the market product power LED has reached 130lm/W. The international semiconductor lighting application market is developing steadily, and the domestic market is developing rapidly.

As LED packaging technology matures, suppliers continue to improve product development capabilities to enhance market competitiveness. More and more companies are eager to obtain technical and processing patents for in-house R&D, thereby reducing the cost of patent licensing, while waiting for the failure of some overseas patents, including core patents owned by Osram, individually by Cree Inc. The patents held by Nikki Chemical (Nic Hia Corp.) will also expire in 2010.

Large suppliers such as Shenzhen Ruifeng and Jiaguang Electronics have obtained the Green Partner Certificate from Sony. In order to go hand in hand with industry-leading suppliers, small suppliers are working hard to improve their quality management systems. Vendors said that the strict requirements of electronics giants Sony, Sanyo and Panasonic will help improve the quality of suppliers' products. In the long run, it is very beneficial to the development of the Chinese market.

Professor Fang said that China's semiconductor lighting industry has entered a period of significant historical opportunities for independent innovation and leapfrog development. In the past two years, China has become an LED full color screen, LED road traffic signal light, solar LED light, landscape lighting and other application products, the world's largest production and exporting countries and internationally important LED device packaging base, and established a complete semiconductor lighting industry. Chain, the emerging semiconductor lighting industry is being built, and the industry scale is expected to reach 500 billion yuan in 2015.

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