LED demand turns to lighting Goldman Sachs Securities optimistic about crystal

Goldman Sachs said that the price of medium and high-power LED lighting has stopped falling, and China's official Street Lighting plan and lighting subsidies will help increase the penetration rate. Although China's LED-related manufacturers are actively attacking the market, there is still a problem of quality and intellectual property (IP) integration. Therefore, the market share of international manufacturers such as Philips, Cree and Jingdian (2448) is still standing.

Goldman Sachs Securities recently contacted domestic LED supply chain manufacturers and found that the price decline of medium and high power LED lighting has eased, but there is still a problem of oversupply in upstream wafers/modules. Therefore, at the moment when LED demand turns to lighting, the wafer factory must accelerate vertical integration in order to maintain competitiveness and stabilize gross profit.

Goldman Sachs pointed out that for traditional LED factories, how to establish access in the highly fragmented Chinese lighting market is the biggest obstacle. For example, Zhejiang Sunshine Lighting Group said it would take seven years to expand its current access in China. Therefore, in the future, the LED industry will be integrated, and upstream manufacturers will cooperate with downstream channel partners. For example, the US company has acquired US lighting manufacturer Ruud Lighting last year.

Goldman Sachs believes that China's major lighting foundries still face the challenge of integrating local LED technology and modules into final products, mainly quality and silicon intellectual property issues. Although the prices of Chinese manufacturers are more competitive than those of foreign manufacturers, the market share of first-tier manufacturers such as Philips, Cree and Jingdian is still stable.

Among them, the utilization rate of crystal power in the second quarter is close to 100%, mainly due to the increase in backlight demand. The second season is usually the peak period of LED backlight demand. Because the backlight module needs 3 to 4 months of process time, it can catch up with the end of the year. Shipped before the holidays in December and December.

Goldman Sachs pointed out that the demand visibility of Jingdian can be seen in the next two months, production capacity will be close to full load by the end of July, but the outlook for the second half is not clear, mainly because the industry still has oversupply problems, and rivals Career and Nichia Huadu is preparing to launch more cost-competitive products. However, the revenue in the lighting category is quite optimistic. At present, 20% of the crystal power revenue comes from lighting. Goldman Sachs maintains a rating on the purchase of Jingdian, with a target price of NT$83.

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Shenzhen Isource lighting Co., Ltd , https://www.isourceled.com