According to China Taiwan technology media reported that the mainland government will require local governments to stop with the LED-related wafer and chip manufacturers to provide subsidies or tax incentives. I do not know whether due to this news, LED upstream chip manufacturers San An Optoelectronics, Hua Can photoelectric shares fell 0.7% and 1.4%.
"Now San An Optoelectronics did not receive the official documents, but the future of the LED industry, the tightening of subsidies is the trend." San An photoelectric Deputy General Manager Wang Qing said. Foshan Lighting Industry Association President Wu Yulin also believes that the current domestic production of chip production equipment is too large, in fact, due to the support of local governments too much, the industry expansion too fast. Data show that the past 6-7 years, China's LED chip for the production of imported MOCVD equipment invested 10 billion yuan, of which local government subsidies accounted for 70% of the funds.
"Dehao Runda did not affect." Dehao Runda Deputy General Manager Deng Fei told reporters, according to its introduction, the company completed by 2012 the production capacity of the layout and investment, then the funds to switch to the downstream channels of NVC lighting and Brand, the upper reaches of the government subsidies are mainly for chip production equipment MOCVD. Dehao Runda in the 2014 annual report said that on February 11 this year, the company's second extraordinary general meeting adopted the termination of the use of funds raised to implement the LED epitaxial chip project motion, suspended the purchase of MOCVD equipment. San An photoelectric, Hua Can photoelectric continues to increase production capacity. In January this year, Huacan Optoelectronics announced that it started production of 15.5 billion chips with RMB305 million. In April, San An Optoelectronics set up a subsidiary in Xiamen, with a total size of 10 billion investment and 200 MOCVDs.
From the earnings point of view, government subsidies are accounted for a large proportion of these manufacturers revenue. Sanyan Optoelectronics 2013 annual report shows that when the company received a total of about 458 million yuan of government subsidies, accounting for the proportion of net profit as high as 44.21%; Hua Can photo subsidies are 135 million yuan under the net loss of 8.62 million yuan; In the first three quarters, government subsidies (other than government subsidies that are closely related to the business and are subject to national uniform standards) are RMB 110 million.
Wang Qing believes that the abolition of financial subsidies on the LED industry, a greater impact on the new entrants, San An Optoelectronics has made a certain industry status. "Even if the impact is positive." Dehao Runda also believes that the withdrawal of subsidies after the industry next year after the resumption of normal state, chip prices have been pulled up, beneficial to business.