LED market MOCVD giant "China dependence" deepens

[Source: "High-tech LED - Research and Review" April issue / reporter Hu Yanling] China is becoming the largest source of income for two global MOCVD equipment giants AIXTRON and VEECO.

“In 2011, China’s market revenue accounted for 55% of Ai Siqiang’s total global revenue. 70% of our MOCVD equipment was sold to the Chinese market.” Recently, Ai Siqiang’s CEO PaulHyland was interviewed by Gao Gong LED. Said.

As the biggest competitor of Ai Siqiang, Zhang Qinglin, director of technical support of Veeco, revealed that in 2011, the performance of VTech's Greater China region also accounted for more than 60% of global revenue.

However, behind the rapid growth of revenue contribution in the Chinese market, LED epitaxial chip companies are blindly expecting the development speed of the LED industry. “There are so many upstream newcomers, the overcapacity crisis caused by over-construction in the short term is inevitable.” Industry insiders said that the strong demand for MOCVD equipment in the past two years is actually overdrafting future market capacity. According to relevant data, in the fourth quarter of 2011, Ai Siqiang’s performance has a loss of 10.9 million euros, while Veeco’s fourth-quarter revenue and net profit both fell sharply.

In addition to the decline in market demand, the endless potential competitors are also an unavoidable problem for the two MOCVD giants. Due to the embarrassment of the Chinese market, a number of equipment manufacturers, including Japan's Dayangjiu and US Applied Materials, are constantly testing the Chinese MOCVD market through various channels, including domestic equipment manufacturers.

However, Ai Siqiang and Weiyike are obviously very confident about themselves. They all said that the company's equipment has reached the requirements of large-scale production after more than 20 years of research and development and continuous improvement. The US Applied Materials and China's domestically produced equipment are due to development time. Shorter, has not been validated by the market.

Promote localization services
On March 16, Ai Siqiang held the opening ceremony of a new training and demonstration center in Suzhou, which is located at the Suzhou Institute of Nanotechnology and Nano-Bionics of the Chinese Academy of Sciences (hereinafter referred to as the Institute of Nanotechnology). Paul Hyland said that the company's new customers can enjoy training services for free in the purchase agreement.

"In the future, with the expansion of market demand, it is not excluded to carry out engineer training services in the mode of enrollment." "Where, Veeco also wanted to cooperate with Nanotechnology in the MOCVD training center, and the result was taken a step by Aisi." Insiders revealed to "High-tech LED". Zhang Qinglin acknowledged that Veeco had contact with Nano to establish a training center, but it has not yet formed a final decision. On May 11, 2011, Veeco's new China Training Center was officially opened in Shanghai. According to Zhang Qinglin, a course can accommodate 20 engineers. He said that the training center in Shanghai can temporarily respond to the training needs of customers in the short term.

For the establishment of the training center, Ai Siqiang and Wei Yike said in unison that they provide technical support to customers, but many equipment manufacturers indicated that they are "with ulterior motives" for "High-tech LED". According to the reporter's understanding, the current domestic MOCVD equipment engineers are still very scarce, and because the MOCDV equipment operation methods of the two manufacturers are different. "Which MOCVD equipment manufacturers can make engineers more familiar with their own equipment, it means opening up the market in the future, and form a market barrier invisibly." A person in charge of an extension company in China said, "This is Ai Siqiang and Weiyi. The significance of the eagerness to set up a training center in China is to achieve the purpose of selling equipment through the invisible channel of control engineers."

Paul Hyland said that there are only two MOCVD equipments in the Ai Siqiang Suzhou Training Center, and other models of MOCVD equipment will be added in the future. The insiders revealed that Nano is renovating a new clean room and laboratory with an area of ​​4,000 square meters.

The short-term market pattern is difficult to change
Interestingly, the above-mentioned insiders revealed to Gaogong LED that Nano is also developing MOCVD equipment and preparing funds for the development of MOCVD equipment.

When the reporter asked about Ai Siqiang to set up the training center in the Institute of Nano, isn’t he afraid of being "stealing the teacher"? He said frankly that Aisiqiang is very arrogant and very confident in his own technology. Equipment manufacturers have not accumulated technology for 10 years, and they are unable to reach the technical height of mainstream equipment in the market.

This statement has also been acquiesced by the head of a domestic equipment manufacturer. "Ai Siqiang and Weiyike have developed for more than 20 years, and their R&D strength and staffing are much higher than domestic enterprises." He revealed that his company used three. MOCVD equipment was made in the year. But the biggest problem at the moment is how to get the equipment to market, because only in practice can we continuously improve the technology and process.

The reporter learned that at present, more than a dozen companies including Zhongke Hongwei, Tianlong Optoelectronics (300029.SZ), Beijing Esprit, and North Microelectronics are developing MOCVD equipment. “The advantage of domestic MOCVD lies in price. The biggest problem at present is how to maintain the long-term stability of the equipment,” said the source.

In this regard, P aul H yland said that the field of MOCVD equipment is highly technically intensive and has a high technical threshold. If Chinese companies want to cross this threshold, they will need a lot of manpower and capital investment in the first place. "It will also be a long process."

“8 years ago, Applied Materials of the United States tried to enter the MOCVD market, but it has not been successful so far, which is enough to illustrate the problem.” PaulHyland said that the MOCVD market competition has been going on for many years, but now there are only two or three companies that dominate the global MOCVD market. “Although many Asian companies are trying to enter the MOCVD field, they still need a very long time and a wealth of practical experience to gain market survival.”

But for Ai Siqiang and Weiyike, there are still strong enemies in the vicinity. Recently, the world's third largest MOCVD equipment supplier, Japan's Dayang Rishen began to enter the Chinese market with high-profile. Previously, Dayang Risang was the largest MOCVD equipment manufacturer in Japan, with a market share of over 70%, but barely involved in overseas markets.

Insiders pointed out that Dayangji acid is entering the time a bit late, they lost the best time of the last round of MOCVD boom.

“We have three MOCVD equipments in operation in Shanghai.” The responsible person of Dayang Riacid China also admitted that Sun Japanese acid has a well-known problem in the Chinese market. Our global market share is less than 6%, and there is still a huge gap compared to Aisiqiang and Veeco.

However, he also said that Dayang Risin is also preparing to cooperate with domestic colleges and research institutes in materials, and will also hold regular MOCVD business training to achieve the purpose of opening the Chinese MOCVD market.

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