The competition in the LED chip industry is getting hotter and hotter, and the big manufacturers are expanding their production capacity and using the scale advantage to drive the market share. The capital market “new upstart†Jucan Optoelectronics is also in close action.
At the investor briefing event on Tuesday, Pan Huarong, chairman and general manager of Jucan Optoelectronics, said that the company's current production capacity is insufficient to meet the strong demand of downstream customers. Therefore, the company needs to gradually expand production and increase production capacity.
Gaogong LED learned from the Jucan Optoelectronics Annual Report that at present, Jucan Optoelectronics owns 52 MOCVD equipment, and the newly purchased MOCVD 7 units under construction projects have not been put into use. Its annual output of LED epitaxial wafers is about 4.5 million pieces (2 inches, the same below), and the annual production capacity of chips is about 3.3 million pieces.
In terms of existing production capacity, there is still a big gap with Sanan Optoelectronics, Huacan Optoelectronics, and Dry Photoelectric. In view of the current lack of capacity, Jucan Optoelectronics has started to expand its existing production capacity from various aspects such as equipment procurement and expansion project construction.
In terms of equipment procurement, Jucan Optoelectronics has optimized equipment efficiency by purchasing new equipment, eliminating used equipment. On December 5 last year, Jucan Optoelectronics signed two major procurement contracts with Shanghai Weiyoke, and it is planned to purchase a batch of metal-organic chemical vapor phase standard deposition equipment from the latter. The total contract value is 69.72 million US dollars, all of which are delivered in batches and instalments. The way of payment.
At that time, Jucan Optoelectronics said that as the equipment was put into production, the company's new production capacity will gradually be released, and it is expected to have a positive effect on the business performance in the coming years.
Shortly after signing the procurement contract with Veeco, Jucan Optoelectronics signed a major purchase contract with Zhongwei Semiconductor. According to the contract, Jucan Optoelectronics purchased a batch of metal organic compound chemical vapor deposition equipment (Model: Prismo A7) from Nanchang Zhongwei, with a total contract value (including tax) of 628 million yuan.
As the only newly-launched LED chip company in the past five years, only in the procurement of MOCVD equipment, Jucan Optoelectronics spent more than 1 billion yuan in just one month, which shows that it is expanding its capacity. Urgent demand for production.
Not only that, Jucan Optoelectronics has made great efforts to support LED epitaxial wafers and chip production R&D projects, and to the subsidiary Jucan Optoelectronics Technology (Suqian) Co., Ltd. (hereinafter referred to as “Jucan Suqianâ€).
On March 1st, Jucan Optoelectronics announced that it intends to change the original fundraising project “Jucan Optoelectronics Technology Co., Ltd. LED chip production R&D project†to “Jucan Optoelectronic Technology (Suqian) Co., Ltd. LED epitaxial wafer and chip production R&D project. (Phase I)".
It is understood that the project of “LED epitaxial wafer and chip production R&D project (Phase I)†of Jucan Optoelectronic Technology (Suqian) Co., Ltd. was established on January 5, 2018, and the main body of the implementation was Jucan Suqian. The total investment of the project is 615.931 million yuan, of which: construction investment is 61.835 million yuan, construction period interest is 8.57 million yuan, and working capital is 34.503 million yuan. The first phase plans to use raised funds of 145,580,800 yuan.
In order to make the expansion project effective, Jucan Optoelectronics plans to increase the capital of RMB 150 million to Jucan Suqian. The $1,494.9 million of the $150 million is intended to be used to replace the company's equipment purchases in the previous period, and the balance is intended to be used for the purchase of other new equipment from Jucan Suqian.
Prior to this, Jucan Optoelectronics had signed a procurement contract with the Suzhou Renovation Engineering Installation Co., Ltd. for the renovation and expansion of the Suqian plant, wastewater, waste gas, and pure water engineering; and the electrical system, fire protection system, water supply system, and drainage system of the Suqian plant. , the process drainage system, pure water pipeline system, process / air pressure cooling water system, air pressure / vacuum system, air conditioning system and other subject matter and Jiangsu Sujing Technology Co., Ltd. signed a procurement contract.
The above two procurement contracts, Jucan Optoelectronics invested a total of 137 million yuan, the fundamental purpose of which is to actively prepare for the subsequent expansion of the company's production capacity and reduce operating costs.
At present, from the perspective of the LED chip industry, Sanan Optoelectronics is undoubtedly the leader of the industry, and Huacan Optoelectronics has also ranked second in the domestic chip industry's production capacity, such as Ganzhao Optoelectronics, Dehao Runda and other chip companies. The factory is also vigorously expanding its production capacity and catching up.
With the release of the capacity of chip manufacturers, the supply and demand relationship of the chip industry will also change, the price of chips will inevitably usher in a new round of downward adjustment, and the competition in the industry will become more intense. This will be the third and fourth echelon chip companies in China. It will cause tremendous pressure.
Under this situation, we can see that other chip companies have also taken action before the release of chip production capacity. Last year, Jucan Optoelectronics hoped to land in the capital market, and finally can borrow capital power and other chip companies to "snap a wrist."
Therefore, in order to make up for the shortcomings in its own production capacity and close the gap with other chip companies, the post-marketing Jucan Optoelectronics has been moving frequently in terms of capacity expansion. This not only reflects the industry's urgent demand for the production capacity of Jucan Optoelectronics, but also indicates that the chip industry has entered a new era of competition.
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