Affected by the global economic downturn, for the IT industry and the semiconductor industry in 2009, both global and China are the year of significant recession since the industry's sharp recession in 2001. LED is a typical semiconductor device, but in the overall recession of the semiconductor industry, in 2009, China's LED industry including substrate, epitaxy, chip, and package achieved an output value of 22.02 billion yuan, compared with 2008. The growth rate of output value reached 12.6%. In 2009, the overall industry downturn achieved contrarian growth and became the highlight of China's semiconductor industry development in 2009.

Figure 1 China's IC industry sales revenue scale and growth in 2005-2009

From the perspective of industrial structure, China still accounts for the largest proportion of the packaging industry. In 2009, the output value of the packaging industry accounted for 87.6% of the output value of the LED industry. However, as the government vigorously supports the upstream extension and the development of the chip industry, on the one hand, investors are optimistic about the development potential of the LED market, and the investment in the extension and chip links continues to increase. On the other hand, existing epitaxial and chip manufacturers are also actively expanding production capacity. Driven by new investment and expansion of enterprises, China's extension and chip industries have continued to maintain rapid development, and their proportion in the industry has gradually increased. In 2009, China's LED epitaxial industry reached 700 million yuan, accounting for 3.2% of the overall industry; the chip industry reached 1.93 billion yuan, accounting for 8.8% of the overall industry. The substrate industry is limited by technical reasons, and the industry is developing slowly.

Figure 2 China LED market application structure in 2009

The development of the LED industry in recent years has been strongly supported by national and local policies. The country has listed power LEDs, InGaAIAs four-element red, green and yellow ultra-high brightness epitaxial wafers as key industries supported by the state. On June 17, 2003, the “National Semiconductor Lighting Project” Coordination Leading Group was established, marking the official launch of the National Semiconductor Lighting Project. On March 22, 2004, the National Semiconductor Lighting Coordination Leading Group was established. In 2009, China expanded its “Ten Cities and Ten Thousand Miles” program to promote LED street light demonstration lighting. At the same time, in the "Electronic Information Industry Adjustment and Revitalization Plan" promulgated in 2009, semiconductor lighting was placed at a relatively high position. In terms of local government support, China's LED industry has formed four major semiconductor lighting industry clusters in the Pearl River Delta, Yangtze River Delta, North China, Jiangxi and Fujian regions. In recent years, in addition to the Ministry of Science and Technology has approved the establishment of Xiamen, Shanghai, Dalian, Nanchang, Shenzhen, five national semiconductor lighting engineering industrialization base, China's East China and inland regions have more new LED projects, currently in East China and inland regions The investment has surpassed the traditional LED production provinces in China, and the LED industry has shown a comprehensive flowering development situation throughout the country.

In the process of industrial investment in the near future, in addition to local enterprises, foreign-funded enterprises also showed an upward trend in investment. In the early stage, considering the many factors such as technology loss, industry support, and market demand, foreign-funded enterprises are more cautious about investing in mainland China, especially for upstream extension and chip links. Foreign-funded enterprises will hardly invest in China. However, with the gradual maturity of various factors, in recent years, some enterprises have begun to transfer the production of upstream links to the mainland. For example, Taiwan’s Dingyuan Optoelectronics invested in Yuanmao Optoelectronics, which is mainly based on chip production in Wuhan. In 2009, another A Taiwanese company, Yuanyuan Optoelectronics, also officially laid the foundation for the LED production base invested in Shandong Weihai. In the same year, Cree also announced the establishment of a chip production line in Huizhou. The Japanese company Nichia also plans to establish a production plant in China to expand its product line coverage. range. With the continuous presence of these foreign-funded enterprises, the development of China's LED industry will be further improved.

At present, unlike the early development mode based on the middle and lower reaches, with the gradual maturity of the industrial environment and the rapid improvement of the technological strength of the enterprise, the upstream extension and chip links have also shown rapid development in recent years. The average annual growth rate is higher than the package. In recent years, the mainland's major extension and chip manufacturers have continuously expanded their production scale. In addition to the original Xiamen production base, Xiamen Sanan is also establishing a new LED industry base in Tianjin; Hangzhou Silan Mingxin is also expanding its epitaxial wafer and chip production capacity, and gradually increasing its self-supply ratio of epitaxial wafers; Jiangxi Jingneng Optoelectronics Co., Ltd. Relying on the technical support of Nanchang University has also achieved rapid development in recent years. At this stage, the development of China's LED industry is gradually getting rid of the mode of middle and lower-end packaging and application as the main body of development, and presents a gratifying trend of simultaneous development of upstream and downstream industries. The structure of China's LED industry is constantly improving.

Judging from the opportunities for the future development of China's LED industry, the following are several favorable factors. First, market demand promotes rapid technological advancement and production costs have fallen sharply. The application of LED in the lighting market is huge and business opportunities are unlimited. In 2009, all countries in the world are promoting LED lighting. At present, LED lighting has been fully applied and promoted in the field of automotive lighting, street lighting, and corridor lighting. Under the attraction and promotion of the market, the pace of LED technology advancement is accelerating, the cost performance of products is increasing year by year, and the production cost is decreasing at a rate of 30% per year, which greatly shortens the cycle of replacing traditional lamps with LED lighting fixtures. The world will usher in a new era of lighting. At the same time, with the development of LED backlights from small and medium-sized LCD backlights to large-size LCD backlights, it is expected that with the popularity of LCD TVs and the wide application of large-size LED backlights, their market demand will also increase significantly. Second, the global industry is accelerating the transfer to emerging countries and regions. With the continuous development of the LED market, the number of LED enterprises has increased rapidly, and the competitive pressure of enterprises has continuously increased. In order to enhance its competitiveness, the global LED industry has seen a new trend in its transfer. Japan, the United States, Europe, and the middle and lower reaches of the industrial chain, Taiwan and South Korea, are gradually shifting the relevant industrial chain links to mainland China and Malaysia, which provides new opportunities for China to develop the LED industry. Third, the state will continue to support the development of the LED industry. As the first choice for the next generation of green light sources, LED will continue to support the development of the LED industry. In addition, the concept of green energy conservation, low carbon environmental protection and other aspects will gradually benefit the people and will also benefit the development of China's LED industry. However, while seeing future development opportunities, it should also be noted that the future development of China's LED industry will also face challenges. The lack of core high-end patents, weak core technologies and unsound standards will become the future development of China's LED industry. The main factor.

It is expected that in the future, driven by the successive introduction and implementation of LED industry and market promotion policies in various sectors of the country, the domestic LED market demand will continue to expand, which will drive the rapid development of China's LED industry, and China's LED industry will continue to maintain rapid growth. In 2010, the scale of the LED industry will reach 24.63 billion yuan, with a growth rate of 11.8%. In the next three years, the growth rate of China's LED industry will be above 10%, and it will continue to develop at a relatively fast pace. It is worth mentioning that In the process of continuously adjusting and optimizing the LED industry structure in China, the scale of China's epitaxy and chip companies will further expand in the next few years, and the number of MOCVD equipment will also increase significantly.

Figure 3 China's LED industry scale forecast from 2010 to 2012

From the perspective of LED product and technology development trends, LED light sources have become a new direction for projector development. Reducing the cost of lamps is the focus of LED lighting equipment development. The market demand for power-type and surface-mount LEDs will grow rapidly. At the same time, LEDs The luminous efficiency continues to increase, and power LED packaging technology will continue to improve.