LED faces huge development opportunities and the policy clearly supports

China is the world's largest producer and the second largest exporter of lighting appliances. The semiconductor lighting industry has a strong industrial base, and the policy clearly indicates support for the industry. Therefore, China's LED will face tremendous development opportunities in the future. It is recommended to pay attention to Lianchuang Optoelectronics (600363) and Silan Micro (600460) (Quote, Information).

As a new lighting technology, LED is a light-emitting device that uses a semiconductor chip as a light-emitting material to directly convert electrical energy into light energy. Since the birth of the world's first semiconductor light-emitting diode in the 1960s, LED lighting has been hailed as the third revolution in human lighting due to its long life, energy saving, rich color, safety and environmental protection.

In 2004, the global LED market was about 4.7 billion US dollars. iSuppli expects to grow to 6.9 billion US dollars by 2008. The high-brightness and ultra-high brightness LED market will grow at an average annual growth rate of about 20%, and the market size will reach 1.6 billion US dollars. . The future LED market for landscape lighting and general lighting is the fastest growing. iSuppli expects the landscape lighting LED market to grow at an annual rate of 50%, and its market share will increase from 2% in 2003 to 8% in 2008. In 2004, General Lighting LED sales were $94 million, and will grow to $875 million by 2010, with an average annual growth rate of 52.3%.

The overall technical strength of China's LED industry is not strong, and it is in its infancy. The scale of the enterprise is generally biased, but the LED industry has already attracted the attention of the state. The National Medium- and Long-Term Science and Technology Development Plan outlines semiconductor lighting products as “focus”. "The field and its priority theme", put forward "focus on research on high-efficiency, energy-saving, long-life semiconductor lighting products." In the field of lighting, China is the world's largest producer and the second largest exporter of lighting appliances. The semiconductor lighting industry has a strong industrial base. Therefore, China's LED will face tremendous development opportunities in the future.

Lianchuang Optoelectronics (600363) (Quote, Information): The company is China's earliest and largest LED R&D and manufacturing enterprise. In 2006, the company's LED revenue will reach more than 500 million yuan. The company already has a complete LED industry chain, which has formed a certain scale from epitaxy, chip to package.

Due to the high technical barriers of LEDs and large capital investment, Lianchuang has clearly defined the development of LED as the core business, concentrated resources to increase LED investment, and strive to form a target of 300,000 square inches and 12 billion chips. On the other hand, the company has also adjusted its industrial development ideas. The next step in LED development is to promote the development of upstream chips and extensions by developing lower-LED LED downstream applications such as LED backlights and application products.

It is estimated that the company's performance in 2006 and 2007 will be 0.11 and 0.29 yuan, and the investment rating will be given to the purchase. The 3-month target price is 8.7 yuan.

Silan Micro (600460): The company has entered the LED field since 2004, mainly through its subsidiary, Silan Mingxin. Relying on its rich experience in R&D, production and sales in the field of traditional IC devices, as well as the existing good semiconductor production and manufacturing platforms, the company quickly mastered the key technologies of LED chips. Silan Micro's LED adopts a flip-chip structure and is positioned at the high end. The overall technology is at the leading level in China.

In terms of industrial development, Silan Micro has a clear industrial layout for LEDs, starting with the chips in the middle reaches, gradually extending to the upstream extension and downstream packaging and application, and through cooperation with foreign giants to enhance the overall level.

Silan's micro-LEDs are developing rapidly and have strong profitability. At the beginning of 2006, LED's monthly revenue was 1 million yuan, and by the end of the year it has reached 10 million yuan/month. It is expected to reach 150 million yuan in 2007. As Silan Micro's position in the LED industry is gradually established, its value will be improved as a whole, giving an investment rating of overweight.




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