At present, the LED industry as a whole maintains a good business climate, such as small-pitch LED, invisible light, automotive lighting, landscape lighting and other market segments have maintained a high degree of prosperity, the penetration rate of the general LED lighting industry is also steadily improving, Hua Can Optoelectronics Director Chang Yuxinhua said that we judge that the downstream demand for LEDs will increase by 10% or more in the next three years. Secondly, the supply side of LED chips is currently more optimistic than expected.
As we all know, in 2017, domestic chip manufacturers including Sanan Optoelectronics, Huacan Optoelectronics, and Ganzhao Optoelectronics all had large-scale expansion activities. This caused the industry to worry about oversupply of chips and overcapacity. However, from the first quarter results report of listed companies this year, Sanan Optoelectronics and Taiwan's crystal power chip companies are indeed facing the problem of rising inventory. In response to the inventory problem, Yu Xinhua said frankly: "Huacan Optoelectronics' inventory has been relatively stable, maintaining a production capacity of 1-2 months, and the company's downstream customer inventory is not very high."
Although Huacan Optoelectronics is relatively stable in terms of inventory, the external competition situation of the chip industry is still fierce. Sanan Optoelectronics is still making efforts to further increase market share; Ganzhao Optoelectronics and Aoyang Shunchang are also full-fledged to catch up; "Xinke Zhuangyuan" Jucan Optoelectronics is also expanding its production and purchasing new equipment. It can be said that the card battle between several major chip manufacturers in China has intensified.
In this situation, the most direct performance of the market is the continuous decline in chip prices and the decline in gross profit. So, what is the performance of Huacan Optoelectronics? "The overall price reduction of LED chips has been in line with expectations this year. The gross profit of Huacan Optoelectronics LED chips has remained relatively stable." Yu Xinhua revealed that "on the one hand, it mainly benefits from the decline of upstream raw materials, such as PSS and sapphire costs are falling, on the other hand Thanks to the continuous improvement of LED luminous efficiency."
When it comes to substrate materials such as PSS and sapphire, Huacan Optoelectronics has expanded its sapphire substrate business upstream of LED chips by acquiring Blue Crystal Technology, and on this basis, it has continuously increased capital and expanded production, enhancing the production capacity of Blue Crystal Technology. Use large-scale production to reduce the production cost of the substrate and enhance the competitive advantage.
Of course, in addition to the layout of production capacity, Huacan Optoelectronics is also actively deploying new application areas. For example, in terms of MiniLED, Huacan Optoelectronics has achieved mass production. Yu Xinhua said that Huacan Optoelectronics MiniLED products have been shipped in batches in the first quarter of 2018, with monthly revenues of several million yuan, and customers are mainly overseas customers.
In addition, the new American accelerometer has already entered the international big brand cars, mainly through Autoliv companies such as GM, Ford, Mazda and other car manufacturers. "This year, Meixin Semiconductor will increase its efforts to expand the domestic car market. The domestic market will have a million-volume sales." Yu Xinhua said that in consumer electronics, we are the first supplier of Microsoft surface and OPPO. . "Overall, Meixin Semiconductor has hundreds of millions of sales. In terms of technology, stability, precision, etc., our products have their own advantages. Follow-up will gradually expand new directions such as gyroscopes and flow meters. To generate new profit growth points."
Finally, when talking about the impact of Sino-US trade wars on the industry, Yu Xinhua said: "The amount of LED chips exported directly from Chinese companies to overseas markets is very small and almost negligible. Therefore, Chinese chip companies will not be affected. The Sino-US trade issue will also not affect the integration of the new semiconductor."

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