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Taiwanese Manufacturers Gain orders due to the Outbreak of Novel Coronavirus (2019-nCoV)

Feb 05, 2020 | By CENS

The outbreak of a new coronavirus (commonly known as Wuhan pneumonia) has intensified. Wenzhou and Yiwu cities in Zhejiang have successively announced that they will be closed down. The second LED brother Huacan Optoelectronics, a major LED manufacturer in Yiwu, will be impacted. Huacan Optoelectronics' LED chip global production capacity accounts for more than 11% of the world 's total production capacity, Yiwu plant accounted for 50% of production capacity, production in this plant will be blocked, market supply will be greatly reduced, Jingdian, Longda and other Taiwanese factories are expected to welcome orders and increase production capacity Utilization and increase gross profit margin.

Industry insiders said that the production capacity of mainland LED chip factories accounted for nearly 60% of the world's production capacity. The leading Sanan Optoelectronics and the second brother Huacan Optoelectronics accounted for 33% and 20% of the production capacity, which means that Huacan's global production capacity accounted for 11.8%. Huacan Optoelectronics, which mainly produces LED chips, has factories in Wuhan, Yiwu, and Suzhou, and Yiwu is the company's major production town.
Huacan Optoelectronics set up a factory in Yiwu in 2017 and started construction in two phases. The first phase has a total annual production capacity of 1.92 million 4-inch wafers, which is equivalent to 2.76 million pieces, which translates into monthly production capacity of 160,000 and 640,000. At the end of 2017, the construction of the second phase of the project was started, which increased the monthly production capacity of 4 inch Lei chips to 250,000 pieces, and about 2 inch Lei chips also rose from 640,000 to 1 million pieces.

Based on this estimate, Huacan Optoelectronics Group's monthly production capacity of 2 inch Lei wafers is about 2 million pieces, and the proportion of Yiwu factories is as high as 50%. According to the supply chain, closing Yiwu in Yiwu may seriously hit the production scale of Huacan Optoelectronics.

From the perspective of supply chain analysis, from the perspective of Jingdian, the monthly production capacity of 2 inch Lei wafers is about 1.6 million, and the ratio of Taiwan and China 's production capacity is about 6: 4. The season is expected to be off-season.

In this regard, Jingdian said that it is understanding the industry dynamics. If the time is prolonged, it may indeed limit the global LED chip production capacity. Longda believes that everything can only be determined after the resumption of work in cities in the mainland.

The legal person said that in recent years, the mainland LED industry has continuously increased production capacity, and the industry has oversupplied. With the impact of Wuhan pneumonia, the production base of Huacan Optoelectronics in Yiwu may be damaged and the production capacity may be reduced. Taiwan LED factories such as Jingdian, Everlight, and Longda are expected to increase their utilization rate, which will improve the gross profit margin.

The outbreak of a new coronavirus (commonly known as Wuhan pneumonia) has intensified. The outbreak of a new coronavirus (commonly known as Wuhan pneumonia) has intensified.
As for the overall LED market situation, the legal person believes that it is still necessary to observe the pneumonia epidemic situation in Wuhan. On the whole, the Mini LED market is worth looking forward to this year. Taichung 's Mini LED R & D is leading the industry and related products are produced in Taiwan. It is expected that the volume of LED products will be positive, which will help the operation positively.

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