TrendForce set consulting, photoelectric research unit (LEDinside) said that in 2021, Apple (Apple), Samsung (Samsung) and other major brand companies plan to launch a comprehensive carrying the Mini LED backlit display of laptop, tablet computer, television, and other products, the supply chain has started in the fourth quarter of 2020 cargo in advance, make the demand of the Mini LED chip, thus squeezing out capacity of conventional chip supply. In the face of structural shortage of LED chips, some LED chip manufacturers have been increasing the chip prices of non-core customers and low gross profit products, which is estimated to increase by about 5~10%.
TrendForce further pointed out that in order to avoid the difficulties caused by the price increase of raw materials after the Spring Festival and the shortage due to the tight production capacity, the downstream manufacturers are actively stocking up. However, the spot of some models and specifications is already insufficient, and the price increase will be the first for small and medium-sized customers who purchase less. However, if the first-line customers with more flexible bargaining power do not accept the price increase, they need to accept the delivery period of more than 2 months, which is significantly longer than the usual two-week delivery period.
At present, EPistar has shipped about 4-inch Mini LED chips, reaching 150,000 pieces per month. Since the gross profit of Mini LED chips is much higher than that of traditional LEDs, EPistar has responded by reducing the production capacity of low-gross profit products. Sanan and HC Semitek, in addition to directly benefiting from the conversion effect of crystal power customers, and the continuous growth in the demand for traditional backlight and direct display RGB chips, also benefited from the rapid increase in the demand for MINI LED chips, about 4 inches.
It is worth mentioning that, Huacan photoelectric focus display with LED chip market product strategy benefit is more obvious, with the advantage of outstanding product cost performance, since the third quarter of last year, has been two consecutive quarters of capacity utilization close to full load. In addition, due to the accident at the TSX plant last month, the production capacity of 400,000 PSS chips was shut down, prompting the price rise of 5 ~ 10% of key upstream materials such as sapphire and PSS chips, which may further aggravate the situation of chip price rise and shortage.
TrendForce believes that the rise in chip prices due to the structural shortage is mainly attributed to the initial outbreak of demand for emerging applications, the lack of awareness of the industrial chain, the underestimation of the capacity utilization in key production links and the consequent capacity crowding out effect, which is expected to be resolved within six months. In addition, the production capacity clearance caused by the downturn of LED industry in the past few years has LED to an increase in the supply concentration of upstream sapphire, PSS and other key materials, as well as an increase in the bargaining power of suppliers. In the case of rising material costs and supply contraction at the same time, the price rise trend has been triggered.