LED, as an emerging industry, has shown tremendous market potential in recent years, drawing significant investment from various capital sources. According to the High-tech LED Industry Research Institute (GLII), from 2009 to 2012, the total newly planned investment in the domestic LED industry reached 580.8 billion yuan. This rapid growth highlights the sector's appeal and its crucial role in the future of technology and energy efficiency.
In terms of investment focus, the past few years have primarily centered on epitaxial chips, sapphire substrates, packaging, and application products. However, as the industry expanded, production capacity across all stages of the LED supply chain experienced varying degrees of oversupply, leading to concerns about market saturation.
Looking at the investment trends over the past four years:
In 2009, the mainland’s LED industry saw a new planned investment of 62.5 billion yuan. This was also a period of rapid expansion in the epitaxial chip field. Taiwanese manufacturers like Jingyuan Optoelectronics, Yuyuan Optoelectronics, Huaxin Lihua, and Huashang Optoelectronics, along with local companies such as Ganzhao Optoelectronics, Huacan Optoelectronics, Diyuan Optoelectronics, and Yaweilang, began investing heavily in epitaxial chip projects. Meanwhile, U.S. and Hong Kong investors started expanding their presence in the Chinese market.
By 2010, the LED industry entered a frenzied investment phase, with annual planned investment reaching 217.9 billion yuan—a 249% increase compared to the previous year. The upstream epitaxial chip sector remained the main target, with 136.9 billion yuan allocated for new projects, accounting for 63% of the total investment.
In 2011, investment in epitaxial chips continued to surge, and the sapphire substrate market saw a sharp price rise, reaching $38 per piece in 2010. This led to a rush of capital into this area. Data shows that in 2011, the newly planned investment in the sapphire field reached 37.2 billion yuan, a 64% increase from the previous year, with 26 new sapphire projects launched.
From January to September 2012, the newly planned investment in the LED industry was 79.4 billion yuan, with an estimated full-year investment of 105.9 billion yuan. A shift in investment focus occurred during this period, with LED lighting becoming the new hotspot. By the third quarter, lighting-related investments reached 35.5 billion yuan, making up 45% of the total.
However, the excessive investment led to overcapacity, especially in the epitaxial chip sector. As of November 2012, there were 909 MOCVD devices in China, but the average utilization rate was below 60%, with only 30% of capacity actually being used. According to forecasts, current production levels could meet downstream demand for the next two years.
The sapphire substrate sector also faced overcapacity. In 2011, 26 new projects were launched, and by the third quarter of 2012, another 14 projects were initiated. The current production capacity for 2-inch sapphire substrates is around 100 million units annually, while actual demand remains under 10 million units. Many companies still rely on imported materials, further highlighting the imbalance.
In the midstream packaging field, the capacity utilization rate was only 60%. In the downstream application sector, apart from LED lighting, other mature areas like display screens and indicator lights are not expected to see significant growth. LED lighting has already entered a price war stage due to increased competition and overcapacity.
Meanwhile, supporting industries—such as equipment, materials, and components like solid crystal machines, wire bonders, brackets, and adhesives—have become new investment highlights. Despite their smaller market size, these sectors have seen growing interest. Over the past three years, newly planned investments in the supporting industry totaled 13.5 billion yuan, representing less than 5% of the total.
In 2012, the localization rate for LED package brackets was about 30%, with approximately 120 domestic manufacturers. It is projected that by 2015, the domestic stent market will reach 16.8 billion yuan, with a production rate of up to 80%. In the packaging equipment sector, the 2011 market demand in China was around 8 billion yuan, with a 30% localization rate, expected to rise above 60% by 2015.
Driven by overheated investment in the industry chain and growing demand from the downstream lighting market, the supporting industry is set for continued growth. With increasing localization, domestic manufacturers stand to gain more market opportunities.
For small and medium-sized investors with limited financial resources, the supporting industry presents a viable option for entering the LED sector in 2013.
Small Mini Excavator, also known as small excavator machinery, small excavator has reliable quality, stable performance, can carry out construction operations in a harsh construction environment, has a wide range of use, has a long service life of the equipment, and can be effectively operated in the field of engineering construction and agriculture. It is powerful and can be operated in rotational excavation, crushing, and timber grabbing.
Air Cooled Diesel Engine,Silent Diesel Generators, 3 Inch Diesel Water Pump,Led Work Light Tower
Vibropac Machinery Co.,Ltd , https://www.vibropac-power.com