What is the status of the advanced packaging industry 2023?

What is the status of the advanced packaging industry 2023?

The semi-annual “transcripts” of 11 LED packaging listed companies revealed their clues. Only 3 companies including Mulinsen, Zhaochi, and Queendom achieved double profits, while 3 companies including Wanrun Technology, Ruifeng Optoelectronics, and Changfang Group did not. Net profit was negative.

Especially in the first quarter of this year, it has been evaluated by many LED industry professionals as the “darkest” Q1 ever. There are very few LED packaging listed companies that can achieve double growth in profits.

Since entering the second quarter, the LED industry has gradually recovered and the market demand for LED applications has recovered significantly. In the first half of this year, a number of listed LED lighting and LED display companies achieved good results against the trend.

Where is the “miserable” LED package?

Under the influence of domestic and foreign macro factors, the rapid growth of the global economy has encountered obstacles, and the balance of supply and demand of products in various industries around the world has undergone certain changes. Coupled with the domestic economy turning to high-quality development, all industries are facing certain pressures and challenges in the short term.

Among them, the pressure on the LED packaging industry is particularly obvious. Especially on the backlight and display side, although the downstream demand keeps growing, due to the sluggish demand last year and the backlog of inventory, the transmission to the midstream and upstream is relatively slow, and the recovery speed is not as fast as expected.

As the largest LED packaging manufacturer in China, Mulinsen achieved a 10.55% growth in its “LEDVANCE” brand in the first half of this year, but its “Mulinsen” brand revenue was only 2.867 billion yuan, a year-on-year decline of 9.6%.

Affected by the shrinking consumer demand in the market, Hongli Zhihui’s LED semiconductor packaging business revenue in the first half of this year was 1.336 billion yuan, a 7.23% decline from last year. To this end, Hongli Zhihui will continue to consolidate the strategic foundation of the LED semiconductor packaging business, leverage the Mini LED project to achieve a breakthrough in the sector, and comprehensively enhance its competitiveness and influence in the LED segment.

In the face of fierce market competition, Wanrun Technology’s net profit continued to suffer losses, but the loss range narrowed by 83.85% year-on-year. Similarly, Refond Optoelectronics’ display LED business and lighting LED business sales have both declined, and net profit has also turned from profit to loss.

At the end of December 2022, after Changfang Group’s light source packaging business moved to Nanchang, it was basically in the state of commissioning and trial production in the first half of this year, which affected order delivery and led to a decline in revenue. In addition, after the comprehensive strengthening of Kang Mingsheng’s management and control on August 8, 2022, production and operation were disrupted by the obstruction of Kang Mingsheng’s original management team. In the first half of 2023, customers and suppliers are still in the recovery period, and production orders and material supply are affected to a certain extent. It also leads to a drop in income.

Where is the “outlet” for LED packaging?

Against the backdrop of a downturn in the general environment, how to develop with high quality has returned to the most important issue for enterprises at present.

In the past two years, the packaging capacity of traditional lighting LED devices with a large area and wide range has been overcapacity, and the packaging production capacity has been concentrated to leading manufacturers, which shows that the market concentration in the LED packaging field will further increase.

At the same time, leaders in the packaging industry have deployed niche markets one after another, and Queendom has strengthened its channel layout and continued to cultivate and develop around future market growth points such as Mini/Micro-LED new displays, smart lighting, outdoor lighting, and automotive lighting.

In the field of automotive LED, with the emergence of new technologies such as smart cockpits, the development of intelligence and multi-function is widely favored by consumers, and the penetration rate has increased. The healthy competition of car manufacturers has spawned AR-HUD, smart car lights, and digital headlights. , car display, car ambient light and many other car LED application scenarios.

In the field of Mini/Micro LED, the application scenarios of Mini LED continue to expand, the commercialization process is accelerated, and consumer-side application products continue to emerge. Application terminals cover TVs, monitors, car screens, commercial display screens, medical screens, notebooks, etc. Queendom Micro LED has also successfully cut into the display of AR devices by virtue of its advantages in brightness and reliability.

Especially in the field of vehicle display, the broad market prospect has attracted many LED packaging manufacturers such as Queendom, Dongshan Precision, Nationstar Optoelectronics, Hongli Zhihui, Jinko Electronics, Jingtai, Jufei Optoelectronics, Refond Optoelectronics, etc. , and achieved remarkable results.

It is understood that Nationstar Optoelectronics’ in-vehicle Mini LED backlight display is carrying out sample certification with customers; Jinko Electronics has launched a variety of car-grade LED devices and modules; The third-generation SAIC Roewe RX5 and other cars; Queendom’s Mini LED products and technical solutions have also cooperated with many customers for verification.

In addition, in the field of high-end lighting such as plant lighting and health lighting, LED packaging manufacturers such as Queendom, Nationstar Optoelectronics, Hongli Zhihui, and Xuyu Optoelectronics have also achieved good results.

“Price rising tide” ushered in an inflection point

Since May, LED packaging manufacturers have sent out price hike signals one after another, and the LED packaging industry has finally ushered in a dawn.

Queendom LED has noticed that many packaging manufacturers including Dongshan Precision, Mulinsen, Ruisheng Optoelectronics, and Zhaochi Guangyuan have successively adjusted prices since May, and some manufacturers even raised prices twice in just over a month. The price increase is basically around 10%.

In the few days since September, Mulinsen, Dongshan Precision, Ruisheng Optoelectronics, Shanxi Xingxin Semiconductor and other companies have issued price adjustment notices again. The current round of price increases ranges from 5-15%, and the coverage of price adjustment products has also expanded. .

Indeed, the improvement in inventory and the urgency to make profits after the continuous price war have supported the price increases of RGB packaging companies and LED display manufacturers.

And rounds of price increases have also pushed the LED industry to usher in an inflection point. At present, the inventory of the entire industry chain is returning to the normal “water level” or even lower than its average level, and some enterprises have begun to replenish inventory. Especially on the LED packaging side, some production lines that were shut down at the end of last year and early this year began to resume operation.

It is worth noting that the current price increase of RGB packaging is also based on the production reduction since last year, and even after multiple price adjustments, the current price is still far from that in 2021.

“The production capacity that was reduced last year has not yet been reopened.” A salesperson from a major RGB packaging factory told Gaogong LED that the current market situation can only be said to have barely returned to a relatively normal level.

GGII analysis believes that in order to truly resolve overcapacity, the first step is to speed up the application of downstream display applications in various market segments; at the same time, packaging companies must also strengthen self-discipline, actively control the pace of production, and make up their minds to truly reduce production. Products must resolutely reduce production.

In general, in the future, with the increasing volume of the Mini/Micro LED market and the significant growth of high-end segment markets such as automotive LED, plant lighting, and health lighting, it is expected to drive a steady increase in the output value of LED packaging.