According to the latest published "2010 China LED Chip Enterprise Industry Analysis Report", China plans to increase the number of MOCVD units in the next few years to more than 1,200 units, of which more than 300 MOCVD plans are planned for 2010. Although, according to historical experience, the actual increase in the number of MOCVD in China will be less than the planned value, but the number of MOCVD plans reflects the current hot LED chip industry in China. It is said that at least 6 companies have more than 100 MOCVD plans, of which Xiamen Sanan and Dehao Runda have already ordered more than 100 units.
1200 units are amazing numbers
According to the Shuiqing Muhua Research Report, LED is currently the most active investment area in the electronics industry. Taking the MOCVD machine upstream of the LED as an example, it is estimated that the global MOCVD machine shipments in 2010 will be 662 units, which is the sum of three years in 2007, 2008 and 2009. It is expected that this high shipment will be maintained in 2011. MOCVD machines, depending on the number of chips processed, each sell for about $1 million to $3 million, and local governments in China can subsidize about 40% of each purchase in order to encourage investment in LED projects. Therefore, in China, a LED investment fever has been set up, and MOCVD machines have been madly purchased. In 2010, nearly 700 units were registered and filed by the National Development and Reform Commission. Some manufacturers purchased directly without the subsidies of the National Development and Reform Commission. The global MOCVD machine is almost monopolized by AIXTRON of Germany and VEECO of the United States. Due to the limited capacity of the two companies, orders are said to have been placed in 2012.
In addition, according to the latest report from SEMI, the number of upstream LED chip factories in the world is distributed by region. China is one of the fastest growing regions, basically equivalent to Taiwan, and is a global leader. As shown in the table below;
Therefore, in order to catch up with the development of the LED industry, local governments at various levels are adopting various subsidy measures to actively encourage the import of MOCVD equipment.
Assuming that 1200 MOCVDs are implemented, if the average unit price is 20 million RMB each, the total investment needs to reach 24 billion yuan, which is a huge market.
Here are some thoughts on importing such a large number of MOCVD equipment.
Advanced technology is not available
LEDs are almost identical to the semiconductor industry, with equipment investment taking the lead. The same equipment in LED chip production plays a key role. At present, the main reason for hindering the popularity of LEDs is that the cost is too high. Only equipment depreciation accounts for 1/3 of the cost, so it is almost 10 times the price of ordinary lighting. And from the development of high-power LEDs, the device plays a role as a card.
Under such circumstances, China imports a large amount of MOCVD, although it can shorten the time of project production and realize the output value earlier. However, it is undeniable that due to the high price of imported equipment, the corresponding depreciation and other expenses are large, resulting in slow cost reduction, lack of competitiveness, and more importantly for imported equipment. Because patent technology is in the hands of others, it may hinder the process of independent research and development. Therefore, in the long run, imported equipment is almost equal to being led by others forever.
In fact, the theory of using imported equipment to develop this way has been well received in the Chinese semiconductor industry. As we all know, advanced technology is impossible to buy with money, and will be repeated again in the LED industry.
Discussion on localization of equipment
The development of the LED industry, stuck in chip manufacturing, that is, MOCVD equipment is the key. However, many people of insight in China have put forward many pertinent suggestions for the development of domestic MOCVD equipment. In summary, it is nothing but the weak industrial foundation, the disconnection of technology and equipment, the control of patented technology, the inability to combine production, education and research, and the need to improve domestic policies. For example, importing spare parts requires tax payment, and import MOCVD can be tax-free, resulting in a large amount of domestic equipment. Importing spare parts and lacking competitiveness in terms of price. All of this is not solved in a short period of time, and it also reflects the difficulty of localization of equipment. Therefore, although local governments at all levels are well-informed, first of all, in order to meet the short-term goals of GDP, they are usually not very enthusiastic about the development of equipment. At least, this is a problem that needs to be solved at the national level.
Recently, I have seen media reports that the Indian government intends to ban the import of photovoltaic power generation related equipment to promote the development of India's domestic manufacturing industry. From March next year, these selected projects must use solar cells made in India. It is thus felt that the Chinese authorities can at least follow suit. Anything must be difficult, but if you don't work hard, you can never achieve your goals.
The market demand for 1,200 MOCVD is a chip, to make full use of it. Obviously, how to form a joint force is an art that tests the wisdom of the competent authorities. In order to illustrate the multiple of 1200 MOCVD chips, the revenue of the US Veeco company is explained. Veeco's Q2 revenue increased 251.4% to $253 million from $72 million in the same period last year; MOCVD equipment shipments reached 81 units. Among them, China's orders may account for 40% of its market share.
Therefore, it is also recommended to adopt a similar scheme with the Indian government, and it can be combined with domestic equipment factories to require a joint venture with China to produce MOCVD to solve domestic demand. Even if the models that were initially co-produced are not the most advanced, it will make the domestic MOCVD equipment industry a big step.
In addition, it has recently been seen that Aixtron will spend 40 million euros (about US$56 million) to build an advanced R&D center, which will be located in Herzogenrath-Kohlscheid, Germany, and is expected to be completed in the next 2-3 years.
As a major manufacturer of organometallic chemical vapor deposition (MOCVD) machines, Aixtron said that the near-term goal of this R&D investment is to meet the LED lighting market demand and hope to help reduce the cost of LED chip manufacturers. The first phase of the R&D center is expected to employ 350 researchers, significantly increasing the R&D capabilities of the prototype. Similarly, China urgently needs to cooperate with foreign parties to build a MOCVD R&D center.
Conclusion
Like the development of the photovoltaic industry, LED has huge market potential. A simple number can tell you that the global semiconductor industry sales will reach 300 billion US dollars this year, the flat panel display industry is 100 billion US dollars, the photovoltaic industry is 30 billion US dollars, and the LED just 9 billion US dollars, reflecting the huge prospects of the LED industry. Therefore, the localization of MOCVD equipment is a matter that must be solved sooner or later. Because relying on a large number of imported equipment to develop the industry is intolerable by any country, China must work hard to find suitable countermeasures and breakthroughs.
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