The LED package expansion horn has been blown again, and the marginalization trend of small and medium-sized enterprises and international companies is obvious.

In the context of the price correction of some packaged devices, the new round of packaging capacity expansion has started again.

This round of expansion cycle, on the one hand, is affected by the growth of downstream market demand, on the other hand, the competitiveness of general lighting devices that are gradually weakened by traditional overseas packaging giants, and the influence of SMEs on the scale of production capacity of conventional general-purpose devices.

At present, China has become the world's largest LED lighting application market, accounting for 28.3%. The High-tech Research Institute LED Research Institute (GGII) expects that China's LED lighting market demand will continue to grow in 2016, accounting for more than 30%.

The demand changes in the downstream market have obvious effects on the transmission requirements of the midstream package. Especially in the top 20 packaging factories in the world last year, only China's LED packaging companies such as Mulinsen, Guoxing and Hongli are in the stage of continuous capacity expansion.

Relatively speaking, major international companies including Nichia, Osram, Philips, and Samsung are seeking differentiated markets with Chinese packaging companies, avoiding their own scale of production capacity and cost-effectiveness in general-purpose devices.

Since the beginning of this year, the LED industry has been circulating news of price increases and expansions, especially for LED packaging companies, which frequently “create” large-scale expansion.

Supply and demand are tight, packaging companies continue to expand production to large scale

Recently, Guoxing Optoelectronics announced that it plans to invest no more than 400 million yuan to expand the company's packaging projects. This is the third time in a year that Guoxing Optoelectronics has expanded its packaging project.

According to the relevant person in charge of Guoxing Optoelectronics, “With the further popularization of LED products and the continuous expansion of market applications, the company’s demand for product orders has continued to be saturated this year, coupled with the mass production of new products, the pressure on production capacity has followed. Increase."

For now, white LED devices, LED modules and small-pitch RGB products are subject to varying degrees of capacity challenges. Guoxing Optoelectronics expects that “after the completion of this round of expansion projects, it will effectively alleviate the pressure on production capacity, continuously improve product quality, and further strengthen market development and cooperation.”

Last month, Jingtai Co., Ltd. was officially put into operation at the new packaging base in Zhangjiagang, Jiangsu. It is expected that 660 LED packaging production lines will be added in the first phase.

“Suzhou Jingtai Optoelectronics has officially put into production on September 25th. From September to October, we will probably have 330 lines, and will continue to have 330 lines at the end of the year. The newly added LED production capacity has reached 4500 KK/month.” Gong Wen, general manager of Jingtai Co., told Gaogong LED.

In addition, the domestic LED packaging leader Mulinsen officially completed the issuance plan in May this year. According to the report, the actual net increase in the current issuance is about 2.316 billion yuan.

According to the plan, the funds raised will be used for the following three projects: Xiaolan SMD LED packaging technology transformation project; Ji'an SMD LED packaging phase I construction project; Xinyu LED application lighting phase I construction project.

Among them, Siu Lan SMDLED packaging technology transformation project will increase the annual production capacity of SMD LED by 51 billion (about 4250 KK / month). After the first phase of the construction of Ji'an SMDLED package, the annual production capacity of SMDLED will increase by 82.5 billion (6875KK/month).

According to the monthly production capacity of 25,000 KK of Mulinsen at the beginning of this year, it is expected that the above projects will increase the production capacity by 44.5%.

In Wang Gaoyang, deputy general manager of Hongli Zhihui, the capacity expansion is mainly reflected in three aspects. First, the number of market demand has increased. Second, the downstream order concentration trend has resulted in a small number of packaging plants that can choose matching capacity. Third, the scaled quality and cost performance advantages are more obvious.

In July this year, Hongli Zhihui's packaging base in Nanchang, Jiangxi was officially put into operation. The first phase of the project has a total investment of 1.009 billion yuan. It is the largest LED production base of the group. It is expected that the monthly capacity of LED packaging will reach 1000KK by the end of the year. The continuous expansion of the scale of packaging capacity has become the main driving force for the rapid growth of Hongli Zhihui's performance.

"As the demand for LED lighting continues to increase, the industry shifts to the domestic market and the concentration increases. The further expansion of production capacity continues to drive the rapid growth of the company's performance." Wang Gaoyang said.

The original orders of SMEs are constantly shifting to large factories

In fact, the environment of the LED industry in the past two years is not very satisfactory. The speed of price decline is very eye-popping, but the demand has been increasing. Therefore, continuing to scale up to reduce the average cost of products is a common practice in the industry to address this phenomenon.

The expansion of Guoxing Optoelectronics this round is mainly based on its own strategic planning and judgment on the LED market. Of course, the transfer of orders from small and medium-sized packaging companies is also one of the reasons for the expansion.

The technical threshold in the field of LED packaging is relatively high, and most small and medium-sized enterprises have limited investment in technology research and development, so the industry is in a trend of concentrating on giants.

As the LED packaging industry gradually concentrates, the situation of the larger Evergrande will become more obvious. For the packaging giants, this is undoubtedly not a new development opportunity.

"Guo Xing Optoelectronics will seize the market opportunity, through the expansion of production projects, give play to the company's technological advantages, production advantages, management advantages and brand advantages, seize market share, and master a greater voice." The relevant person in charge said.

Another important reason for this round of expansion is the tight supply and demand of display devices. In particular, the rapid growth in demand for small-pitch display screens has led to insufficient supply of upstream capacity.

Gong Wen believes that "the expansion of the packaging enterprise is mainly due to the growth of the entire display market. With the increasing proportion of small-pitch applications, the use of LED lamp beads per unit area is also increasing."

In terms of competition with traditional international manufacturers, Chinese packaging companies have gained sufficient competitiveness in terms of technology, products and market share after rapid growth over the past few years.

In Gong Wen's view, compared with the market size of domestic packaging manufacturers such as Hongli Zhihui and Mulinsen, they are much smaller in size and have a smaller share in the entire packaging market.

Secondly, in the field of traditional lighting, their device manufacturing costs are relatively high, and there is not enough competition in terms of price.

Third, these international giants are subject to cost pressures. Many of them have adopted the OEM model in China. The wool is on the sheep, and the final production capacity is still on the domestic packaging enterprises.

"There is still confidence in the development of China's LED packaging companies in the future." Gong Wen said.

Especially in the field of small pitch, the domestic packaging manufacturers represented by Jingtai, with its strong R&D strength and cost-effective cost solution, completely replace imported small-pitch patch devices, thus laying a solid foundation for the LED small-pitch market explosion. basis.

Therefore, at the same time as the first phase of the Zhangjiagang project started, Jingtai also announced that it is preparing for the second phase of the project. It is estimated that the total investment will be 1.5 billion yuan, mainly for the production of small-pitch packaged devices. The project will build more than 1,300 fully automatic packaging production lines, which will form a monthly capacity of 10,000 KK after production.

Expansion of production drives packaging equipment and materials demand

The continuous expansion of packaging companies has also driven the rapid growth in demand for the packaging equipment market.

Localization of equipment has become a trend, which is undoubtedly a good opportunity for domestic equipment companies.

Song Changning, general manager of Xinyichang, said, “The continuous expansion of the packaging giants has also driven the demand in the equipment market. We have already made adjustments to the supply of Guoxing Optoelectronics and Hongli Zhihui.”

In fact, as early as the beginning of this year, Xinyichang has already expanded its production plan, and it is expected that the overall 2016 performance will increase by about 40% compared with the same period last year.

From the perspective of equipment companies, which types of devices perform best in the packaging market this year?

“This year, the best performance of lighting devices, the mainstream model is 2835 devices, while the RGB mainstream models are 2121 devices.” Fan Guobao, sales director of Taigong Technology, mentioned.

In addition, the substantial expansion of the packaging manufacturers has produced a positive effect on the material manufacturers.

Chen Tao, general manager of Keheng's LED business unit, believes that the expansion of packaging enterprises is the inevitable development of the market. As the development of the industry becomes more and more centralized, enterprises will start to take the road of scale, and finally a few major manufacturers will continue to dominate. , and some of the distinctive companies to do the subdivision.

"From the perspective of material companies, the performance of the filament lamp market is relatively good this year, and the growth rate is relatively fast." Chen Tao mentioned.

Chen Yongsheng, general manager of Jieguo New Materials, also said, “This year's packaging market is relatively ideal in the field of flip-chip and filament lamps. These market segments are basically from scratch and the growth rate is obviously faster.”

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