Crystal Power starts large-scale production reduction: freezes 1/4 MOCVD capacity

LED chip faucet Jingdian has started the largest production reduction in history, shutting down 2 factories in total, freezing its MOCVD capacity by up to 1/4, and optimizing production capacity. In the fourth quarter of last year, Jingdian proposed one-off asset impairment and inventory price loss. And confirm that the fourth quarter of the operation bottomed out, after the big action cleaned up the battlefield, the deficit in the first quarter is expected to converge.

In the second half of last year, the economy turned straight down. The annual LED lighting price fell by 30%, impacting the operation of LED factories. Jingdian confirmed that due to the reduced utilization rate and idle capacity, a factory has been shut down in Taiwan and mainland China. Capacity optimization, downtime to eliminate old machines, and centralized management of available machines, it is estimated that this wave reduction is equivalent to freezing one-fourth of the capacity.

Jingdian is a major manufacturer of LED chips in the world. It has 500 MOCVDs, of which 450 are producing blue LEDs, and the remaining 50 are mainly quaternary LEDs. After years of consolidation, Jingdian has 8 factories in Taiwan. The frozen production capacity is the largest in history, and it is also the first time that the factory has been shut down. The factory that is closed in Taiwan will be given an opportunity.

Jingdian pointed out that under a series of rectification actions, the one-off asset deduction of several hundred million yuan in the fourth quarter of last year and the inventory price loss of 400-500 million yuan led to the loss of the previous quarter, but the inventory level was also The decline in inventory in the previous quarter has dropped from 7.761 billion yuan to 6.573 billion yuan, a reduction of 15%.

Jingdian also announced its annual financial report yesterday. Due to oversupply of production capacity, TV backlight demand was flat, LED lighting was hit by the brand factory to start the price war and hit ASP. Jingdian turned from profit to loss last year. The net profit after tax for the whole year was 3.018 billion yuan per share. After-tax net loss of 2.81 yuan, the loss hit a record high; in the fourth quarter, a single quarter loss of 2.659 billion yuan, both annual and quarterly to pay a loss report; from the perspective of the rate of profitability, Jingdian last year, the industry turned losses, all The annual loss rate was as high as 13.76%, and the average gross profit margin also dropped to 0.48%.

After re-cleaning the battlefield, Jingdian began to eliminate low-priced orders in the first quarter, reducing the supply of low-priced products, and the inventory level has seen a decline. Although the number of days in the Lunar New Year holiday in February is still low, the utilization rate is still low. However, according to the current orders, the demand for TV stocking has increased. The demand for indoor and outdoor billboards continues to rise. It is expected that the utilization rate will rebound in March. The market situation in the second quarter is expected to be better than the first quarter. It is already the bottom of the operation.