LED Sapphire Substrate Industry Analysis

1. Higher barriers to industry entry and weak foundations for industrial development In all aspects of the LED industry chain, sapphire substrates and MOCVD equipment are the two highest barriers to entry. In recent years, the sapphire substrate industry is in an oligopoly competition stage. In 2010, more than 90% of global production capacity and manufacturing technology of high-end products were concentrated in the hands of seven or eight international manufacturers such as STC, Rubicon, Onocrystal, Kyocera and Namiki. Here, they integrate process equipment, patented technology, R&D team, and sales channels, setting a high threshold for entry into the global market. In addition to the extremely high technology and equipment thresholds, sapphire substrates are still capital-intensive industries. It is roughly estimated that the annual investment in the construction of a full-scale production line with a high automation level of 5 million will be close to one billion yuan. At present, only a few companies in China, such as Yunnan Lanjing, Harbin Ao Ruide, Silian Optoelectronics, Yuanliang Technology, Chengdu Dongjun, etc., can achieve the production of long crystals and rods. Among the companies that have cut and shuffled in the next paragraph are Yunnan Acer, Silian Optoelectronics and Tongren Electronics. These companies also have Chinese LED sapphire substrates in terms of production scale, crystal size, yield, processing cost, etc. The industry dialectically analyzes the large gap. According to statistics from all over the country, in 2010, China’s production of qualified sapphire substrates meeting downstream epitaxial growth requirements was only 500,000 pieces, which was less than 2% of global production. In the same period, the market demand for sapphire in the downstream extension of China exceeded 2.5 million, and the potential market demand will soon exceed 5 million. It can be seen that China's LED sapphire industry is still at the initial stage of development from the scale of the industry, the number of enterprises, to the technical strength, and the talent team, and the foundation for industrial development is still relatively weak.
Second, China's sapphire substrate industry, which has undergone a difficult process, began to recover. Due to technical and market constraints, China's LED substrate industry has been lagging behind in terms of epitaxial, chip, and packaging links. The main products are red, green, and green. The gaAs/InP/GaP substrate material used for light is the main material, and the sapphire substrate industry is very limited in scale. In 2008, the developing Chinese LED sapphire substrate industry also failed to avoid the impact of the global economic crisis. The modest downstream demand was severely tightened. The profits of upstream sapphire crystal growth and wafer processing companies were severely squeezed. Companies such as Zhejiang Juhua, Daqing Huatai, Tianjin Safa, Shenzhen Aibidong, and Changzhou Huaxia Integration all stopped production and withdrawn from the market. At the same time, some powerful enterprise groups are optimistic about the broad market prospects of blue-and-white LEDs, and will purchase sapphire manufacturing companies abroad at a low price to lay out the sapphire industry. In 2008, Silian Group acquired Honeywell’s sapphire division, including its Canadian production facility, R&D team, and sales channels. The successful acquisition enabled Silian Optoelectronics to quickly acquire the growth, processing technology, and related technologies of international first-line quality sapphire substrates. Production and marketing resources have laid a solid foundation for Silian Optoelectronics' domestic layout.
From the second half of 2009 to 2010, driven by the rapid development of the downstream midsize LED backlight and LED lighting market, the rapid expansion of GaN epitaxial/chip capacity has led to a shortage of upstream substrate supply, which has driven prices to continue to rise, and has been applied to blue and white LEDs. The growing sapphire substrate industry began to accelerate development. Although the performance indicators and yields of sapphire substrates in domestic companies are still relatively low, there is a shortage of sapphire substrate material growth professionals. However, driven by higher industrial profits, many companies in China have begun to lay out or declare in 2010. Into the field of sapphire substrates, and gradually increase capital investment and the introduction of related key technologies. From 2010 to mid-2011, there were a total of forty or fifty enterprises that had sapphire production and investment in the country, and most of them lacked support from independent technical teams. At present, there are only a dozen companies that can achieve stable production and sales of sapphire products. Among them, Yunnan Blue Crystal, Silian Optoelectronics and Tongren Electronics have realized the vertical integration of sapphire industrial chain, such as long crystal, boring bar, cutting and polishing, and washing and sealing; Harbin Ao Ruide, Chengdu Dongjun, Shandong Yuanhong, Yuan Liangyue Technology is focused on the segment of long crystal and boring rods, providing sapphire crystal rods for the downstream; Jiaozuo Kerisida, Qingdao Jiaxing, Crystal Optoelectronics, Jinke Optoelectronics, Can Optoelectronics and other companies are mainly engaged in the next paragraph of the substrate processing Crystal Optoelectronics, China National Semiconductors, Silan Microelectronics, and Corun Optoelectronics are all working on the development and industrialization of the patterned substrate. In 2010, the output of China's crystal rods was close to 3 million mm (calculated on a 2-inch basis). Since the domestic lower cutting and polishing process technology lags behind the level of industrialization, the country mainly exports crystal rods and blanks, and processing is sold back to the open box. With products as the main product, there are fewer manufacturers that can produce polished wafers with acceptable quality and market recognition. If we do not consider intermediate products such as ingots, ingots, and slicing, consider only the production of qualified sapphire polished wafers that can satisfy downstream epitaxial growth. In 2010, the size of China's sapphire substrate industry was only 582,000, an increase of 161.0% year-on-year. The output value was 126 million yuan, a year-on-year increase of 276.3%.
1. There are more investment cooperation methods and less successful development models At present, China's sapphire industry investment method needs to be viewed from two perspectives. Http://
At the first level, China's sapphire companies have a lot of industry entry models. Independent research and development and independent operation of the model, the typical company has Yunnan Alabang, Chengdu East Jun; foreign acquisition and foreign aid import model, typical companies have four joint optoelectronics; original technology accumulation and outsourcing equipment improvement model, typical enterprises have Harbin Austrian Reid, Yuan Liang Technology, Crystal Optoelectronics, etc.; large capital investment and equipment technology to complete the purchase model, a typical enterprise Guiyang Gongtou and GCL Optoelectronics. On the second level, the same company involves the diversification of crystal growth technology. In addition to using Czochralski crystals, Silian Optoelectronics is also attempting to blister and heat exchange methods. GCL Solar and Guiyang Gongtou are both exploring the foaming method and the heat exchange method at the same time, except that the suppliers and technical teams of the equipment used are different. It can be seen that the investment mode of China's sapphire industry is diversified. At present, it seems that only the development pace of Yunnan Lanjing and Harbin Ao Ruide is relatively stable. In the early stages of industrial development, diversification of business development models is normal and reasonable, but there are few development models that can adapt to China's national conditions and to the laws of industrial development. The truly successful development model still requires the selection of market competition in the next two to three years.
2. Larger potential for increased production capacity and smaller output kinetic energy According to incomplete statistics, as of the end of the second quarter of 2011, the cumulative production capacity of Chinese sapphire substrate projects exceeded 150 million units (converted by 2-inch wafers), regardless of the upstream Looking at the supply capacity of technical equipment and the supporting capabilities of raw materials and processing materials, it is still the global market demand for the next three to five years, even considering the rapid increase in the international competitiveness of China's sapphire industry in the future, the capacity utilization rate, and the yield limit. Factors such as this expansion of capacity also appear to be radical. Before the large-scale start-up of LED general lighting, there will be a two-to-three-year gap period. It is expected that from the current forty to fifty years, it will stand out from the current forty to fifty manufacturers and the actual output will be 300 to 10 million pieces. Business.
It is worth noting that there is currently a clear contrast between the impressive planned production capacity of China's sapphire industry and the actual output that lags behind.
The small output of China's actual production from 2010 to 2011 is mainly due to two reasons. On the one hand, China's sapphire industry has just started, and many projects are under construction. It takes 4 to 8 months for equipment supply debugging and improvement of Fengshui's electrical and other production facilities. time. In addition, in order to meet the market requirements for product quality and price, the optimization of the production process and cost control also take a long time. On the other hand, the pulling effect of the downstream medium and large-sized backlights on the upstream has gradually declined, and the next round of LED general lighting market has not yet started on a large scale. Large production capacity will be opened in advance and will face greater market risks. Therefore, from 2010 to 2011, China The output of sapphire substrates remains at a relatively low level and is expected to grow by a large margin by 2012. In 2013, it will gradually meet the needs of the domestic market and increase the proportion of product exports. Http://
3. The industry has a wide range of distribution and the impact of location factors is small. The LED sapphire substrate industry is located in the upper reaches of the entire LED industry. The demand for upstream raw materials and processing materials is relatively small, and the product sales logistics scale is not large. Therefore, it is for industry support and transportation. The logistics requirements are not high, and location factors have little effect. The LED sapphire substrate industry is a technology and capital-intensive industry, and it is also an energy demand-intensive industry. In the industrial layout, in addition to considering technical and financial factors, the quality and price of electricity and water will also be considered. Therefore, sapphire substrate production tends to be more inland in the energy supply, even in the central and western regions. Therefore, relative to the distribution of industries in the middle and lower reaches of China's LED industry, the scope of investment in upstream sapphire substrates is relatively decentralized. In addition to the industrial hotspots in North China, East China, and South China, the southwest, northeast, and northwest also use electricity and water power. With regard to its comparative advantages in land, policies, and other aspects, it is actively laying out the sapphire substrate industry. At present, China's sapphire industry has formed a trend of decentralized distribution from technological highlands to costly ones. Incomplete statistics indicate that as of the end of the second quarter of 2011, more than 30 companies in the Chinese mainland were carrying out new project construction and reconstruction projects for the production of LED sapphire substrates.