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The status and future of major LED industry clusters in China
Time£º3/5/2011 1:33:58 PM

The status and future of major LED industry clusters in China

In the rush to develop energy-saving and environmental friendly products, under the guidance of state policy, policies are produced to support LED development in succession at the local levels to accelerate the distribution and development of LED industry, so as to gradually form industry characteristics. We can also see that there is too hot investment in LED industry at present. It’s of great importance to know how to utilize the local comparative advantage and reasonably distribute LED industry. In order to further inform readers about the LED industry at local levels, we will introduce you about the present and characteristics of LED industry.

  Fujian: Accelerate the importation and production of upstream substrate materials
“Implementation of promoting the development of LED and Solar PV industry (2007-2010)” issued in 2007 provided powerful policy for Fujian to develop LED industry. Till 2010, Fujian LED industry production value will reach 13 billion. With the constant technique improvement, the lighting effect of its self-innovated power white LED has reached 80lm/W~90 lm/W and accomplished industrialization, which meet the target as mentioned in the “Implementation…”; and we are on the way to speed up the R&D and industrialization of high power white LED chip with efficacy up to 120 lm/W. With the steady improvement of public service platform, Xiamen invested in the forming of “Xiamen LED Test and Authentication Center”, the “State semiconductor light emitting device (LED) application production quality supervision inspection center” based on the above foundation accepted by the country smoothly. To support the park construction, in 2009, the former provincial department of information industry selected 8 “photoelectric industrial park” all over Fujian province. The industrial parks that set LED as the main industry are as follows: Xiamen torch hi-tech district, Fuqing Rong Qiao Economical and Technological Development Zone, Putian Hi-tech Industrial Park, Quanzhou Nanan Photo-electronic Information Industry Park, Zhangzhou Yunxiao Photo-electronic Information Industry Park, Yongding Dehong Photo-electronic Information Industry Park, and so on. More than 90% of the LED projects are settled on those parks. LED epitaxial, chip leading enterprises like Sanan, Changelight, JingYu; packaging leading enterprises like Hualian, Guangpu, as numerous of application products manufacturing enterprises are all settled on Xiamen torch hi-tech district. Since the second half of 2007, Yunxiao Photo-electronic Information Industry Park has introduced about 88 current construction projects and contracted photo-electronic projects; the LED industry is beginning to take shape.
Development Goal

 As for the upstream substrate materials, epitaxial and chip manufacturing, Fujian fully supports LED epitaxial enterprises and chip leading enterprises to catch up with international advanced technologies and expand the scale of production; and speed up the introduction and production of upstream substrate materials. As for packaging, Fujian gives great support for packaging enterprises to grasp high power packaging, modularized packaging, ceramic packaging, surface packaging, flexible packaging and other new packaging technologies, so as to improve the overall packaging level and expand packaging types. As for the application, Fujian mainly supports the R&D and industrialization of the application productions such as LED backlight, commercial lighting, special lighting, car lighting and so on.

 Shanghai: Obvious advantages of the industry-chain two-end
“Shanghai to promote high & new technology industrialization of electronic and information manufacturing industry Action Program” issued in 2009 set LED as the main development field. The Shanghai Expo provided a good platform to demonstrate LED technology. Preliminary measurement showed that there are totally 1.3 billion LED chip used inside the Expo; and about 80% of the lighting inside the Expo is LED green lighting. The 400 square meters super semipermeable LED Hi-fi displayer accomplished by Shanghai Advanced Photonics Co., Ltd., in Expo should be a pioneer in China.
As one of the national semiconductor lighting industrial bases, Shanghai has almost established a complete industry chain; there are especially advantages in the two ends of the industry chain—the LED upstream epitaxial chip and the downstream application step. There are Rainbow Optoelectronics Material Co., Ltd. and Epilight Technology Co., Ltd. and some other enterprises as the epitaxial and chip manufactures, who have leading position in engineering level at home but with small scale. As for the application in the downstream, Sansi LED Display, Xiaomi LED car light, Yaming Landscape lighting and some other products dominate the leading place in the lighting field. Meanwhile, many international leading enterprises such as Philip, GE, Keda all set their headquarters and R & D center in Shanghai. And Fujian has established its complete industry chain framework “Epitaxial wafer-chip-package-application-device”.
Development Goal

As for industry scale, Shanghai should try her best to take the lead position in China; as for innovation ability, Shanghai should construct good innovation system, keep its leading place in China and reduce the distance between international advanced level and itself; Shanghai should form one or two industry leading enterprises in epitaxial wafer, chip, advanced application and other stages; and Shanghai should construct many famous enterprises and famous brand products on the part of backlight, display, car light, lighting and so on.

 Henan: most of the enterprises are in the lower and middle reaches of the industry chains
There are 18 large-scale LED enterprises in Henan; among which there are 4 enterprises focus on LED epitaxial wafer manufacturing and chip manufacturing, and many more focus on LED device packaging and LED production application. Samost Photoelectrical Scientific Stock Co., Ltd., which is the leading enterprise among LED industry key enterprises in Henan, reached 286 million Yuan for its sales revenue in 2009. Under the guidance of provincial enterprise technical center and LED lighting engineering research center, the company is now to construct Solid State Lighting industrialization application and demonstration base in Zhenzhou which integrates epitaxial wafer, chip, packaging and application.
Henan Huayang Energy Power Tech Co., Ltd. has high power semiconductor illuminating technology key engineering lab, problem tackle base affirmed by state semiconductor illuminating commission of ministry of science and technology, high power LED drive circuit innovation patent as well as many LED lamp utility model patents. Its high power chip packaging technology takes the leading position in China. The LED illumination standard formed by it is affirmed by Henan qualitative inspect branch and is settled as the provincial LED industry standard.
Zhengzhou Zhongyuan Display Technology Co., Ltd. was established in 1988, which is the first national major hi-tech enterprise listed in Henan by Torch program branch of the national commission of science and technology. Its LED large screen display technology fills many gaps of the country and wins the national scientific and technological progress award the second class, whose representative products are as follows: main display screen of the Beijing Asian Games, Sydney Olympics; time counters for the returning of Hongkong and Macau in the Tian’anmen Square and so on. The 3D display and high resolution large screen researched and developed by the company has been applied in Shanghai Expo. Now the company is facing restructuring due to operation and management and some other reasons.
Development Goal

Support the development of LED application products; focus on the development of LED chip packaging; develop LED upstream material and the supportive industries; introduce and develop the chip manufacturing of LED epitaxial wafer. Establish national LED industry R & D center, enterprise technology center and key laboratory based on the advantageous enterprises. Develop advantageous enterprises and leading enterprises endowed with core technology and competitive advantages, form LED illuminating industry chain and industry cluster area so as to promote rapid and healthy development of the industry.

Chongqing: well organized R & D organization and talented group
Chongqing used to be one of the three illuminating bases in China; and the 44th Institute of China Electronics Technology Corporation is a photoelectron research institute in China, who had began to deal with LED research in 1960s. In the early 1980s, Chongqing Wenqing Electronics which was jointly invested by Chongqing No.2 Radio Factory and Tanwan-based manufacture was one of the biggest LED packaging factories at that time. Chongiqng Coal Research Institute has taken the lead in developing flammable gas alarming and LED integration mine lamp, and has passed the antiriot authentication and manufacturing license. The LED mine lamp industry standard developed by Chongiqng Coal Research Institute has been recommended as the national standard.
After decades of developing, Chongqing has its well organized R & D organization and talented group, and it has initially formed LED industry chain with its focus on application and covers all ranges of the industry chain; the upstream material industry, Silian group has successfully acquired Honeywell Sapphire Substrate materials; in the middle reach, it has mastered key core technology such as high power LED chip packaging, and it has developed many innovative products such as surgery shadowless lamp. The industry scale has been expanded from 10 enterprises with tens of millions of annual output value in 2004 to 60 enterprises with billions of annual output value nowadays.
During recent years, Chongqing LED industry has made great progress in technologies such as high power LED package, multi-chip packaging, heat emission with low cost, efficient driver circuit and so on; and has developed a series of characteristic products such as
LED display, LED traffic signal light, fence light, underwater light, LED surgery shadowless lamp and so on.
Development Goal

Till 2015, Chongqing will accomplish the 10 billion Yuan investment plan, realize the income from sales of 25 billion Yuan annually, and establish one or two key enterprises with over 10 billion annual income, develop two or three national engineering (technology) research centers, test and authentication center as well as application search center. Based on the upstream industries such as epitaxial wafer, chip manufacturing and advanced packaging, Chongqing will mainly support Silian Group to develop Sapphire Substrate and Chip packaging. Through the close strategic cooperation between Silian Group and international famous chip manufactures, Chongqing will attract globally first class epitaxial wafer and chip manufacturing enterprises to make investment in Chongqing, so as to form a complete industry chain as “substrate material-epitaxial growth-chip manufacturing-package”, thus finally to form the industry cluster layout by one substrate manufacturing enterprise, three to five epitaxial wafer and chip manufacturing enterprises, ten to twenty advanced packaging enterprises and hundreds of application enterprises.

Shangdong: many new construction projects with huge investment
There are almost 130 LED enterprises in Shangdong now. The products range from fundamental industry which mainly deal with the substrate material, epitaxial wafer, chip, device package, equipment manufacturing, to application industry such as semiconductor lighting (street light, interior lamp, landscape lamp, car light and so on), signal indicator light, backlight (applied in color TV, computer, mobile phone and so on), and display. In this way, Chongqing has formed its six industries cluster: Jinan, Qingdao, Dongying, Weifang, Jining and Weihai, and has developed many leading enterprises such as Jinan Langchao Huaguang Photoelectron, Weifang Zhongwei Photoelectron, Dongying Techtop Opto-Electronics Technology Co., Ltd..
There are too many new construction projects in the LED industry field which demand for huge investment. Foxconn has invested 500 million USD to establish and develop LED lighting, packaging and screen in Jinan Hi-Tech industry district. Haier Group has reached cooperative intention with Epistar, Taiwan to invest 800 million Yuan to establish LCD backlighting module project in Dongying. Formosa epitaxy has established Formosa epitaxy Opto-Electronics Technology Co., Ltd. in Rushang. The industry park to research and develop energy saving LED lamp and semiconductor is jointly invested together by Changchun Institute of Physics, CAS, China, Wenshang Government and Huadu lighting Co. with overall investment of 620 million Yuan, and the first phase project with 120 million Yuan has started. Up to now, there are about 33 major projects opened and to be established through technological renovation, cooperation between industries, universities and research as well as investment promotion, the total investment is 32.5 billion Yuan, among which there are 17 projects of which the investment exceeds hundreds of million Yuan.
Development Goal

Closely follow those major projects, so as to make it into practice as soon as possible. Strengthen the cooperation between industries, universities and research; strengthen industry innovation alliance, enterprise technology center and major laboratories. Strengthen standard forming; accelerate the construction of LED product performance and quality testing laboratory; standardize enterprise manufacturing behavior and market order. Develop many leading big enterprises and medium-sized enterprises.

Shenzhen: important manufacturing base for LED application productions
There are about 1,100 enterprises dealing with the R & D, developing, manufacturing and application of semiconductor lighting technology and the related products. Thus gives Shenzhen the complete LED industry chain and matching capacity. Shenzhen is the main manufacturing location for packaging and special lighting, as well as the biggest LED display manufacturing and supply base in China. Shenzhen has been the biggest Solar LED lamp manufacturing and supply base as well LED backlight manufacturing and supply base world widely.

2009, Shenzhen municipal government issued “Shenzhen to promote efficient and energy saving semiconductor lighting (LED) production demonstration project”. Shenzhen issued special policy for semiconductor lighting demonstration project, and the focus of the policy is to increase financial investment and promote social investment. The demonstration project brings about some production technical standard. In February 2010, Shenzhen government related department issued “Shenzhen LED street light production technical standard and efficacy guideline (trial)”, “standard” clearly confirmed for the first time the energy grade three that combined color temperature, color rendering index and light efficacy, and put out specific energy saving suggestions such as sub-period lighting, single light controlling, grading dimming and so on.
Development Goal

To make Shenzhen an important demonstration base for LED industry technology innovation in China and an important LED production R & D base globally in 2015. Realize annual output value of over 130 billion Yuan; realize industrialization in white general lighting field and form a complete industry chain and innovation chain; support and develop many leading enterprises with international competitiveness, support and develop over one enterprise with output value more than 10 billion Yuan, two or three enterprises with output value more than 5 billion, ten or more enterprises with output value more than 1 billion Yuan; develop many famous brand products, master many core technologies to make Shenzhen an international technological innovation and service platform.

Anhui: extend to the upstream industry based on LED chip
Though LED industry in Anhui is just at the beginning phase, as an important strategic burgeoning field in Anhui, now it’s experiencing booming period. Since the carrying out of the industry relocates demonstration area in Wanjiang cities, LED industry has become the focus of the industry relocate. In February 2010, total investment of 12 billion of Sanan optoelectronics of Wuhu optoelectronic industry project began to be constructed; In August 2010, total investment of 10 billion of Hefei Rainbow blue-ray full color high brightness LED epitaxial wafer and chip project began to be constructed; total investment of 6 billion of Elec-Tech Internation Wuhu LED production line project is under construction. Data showed that 37% of the LED enterprises are newly registered, most of which are newly established along with the relocate demonstration project.

LED enterprises are located over most of the cities. In Hefei and Wuhu, the focus is epitaxial wafer and chip manufacturing which attracts huge investment; the focus of the other cities is mostly packaging and application. Wuhu has issued “Policies for developing LED industry”. The whole city should take the key enterprises such as Sanan Optoelectronics, Elec-Tech Internation, Bonder Kingsun and so on as their leaders, take the development of LED chip as the priority, thus to promote the development of substrate, raw materials like MO source (high purified metallorganic compounds) as well as MOCVD (Metal Organic Chemical Vapour Deposition) equipment manufacturing industry gradually in the upstream; back lighting, display, motorcar as well as well as the packaging and application in general lighting areas; thus to build a complete industry chain.
Development Goal

Focus on the construction of major industry relocate projects of LED optoelectronic industry; promote the manufacturing of LED epitaxial wafer and chip;   and develop the industry chain of LED epitaxial materials, expitaxial wafer, chip manufacturing, device packaging, special equipment, related materials and product application. Make progress in some key technologies such as power chip and device, driver circuit and standardized model group, system integration and application and so on, thus to establish a more complete industry chain and technology innovation chain. Up till 2015, to be a leading technology R & D and service platform in China, and get many invention patents as well as state and industry technique standard. It’s predicted that till 2015 the output value of semiconductor lighting of the whole city will reach 50 billion Yuan.

Tianjin: characterized LED automotive headlamp
Tianjin has formed a more complete industry chain which integrates substrate materials, epitaxial wafer manufacturing, chip manufacturing, equipment packaging and LED application. Thus formed a semiconductor lighting industry chain enterprise cluster which includes enterprises from all ranges of the industry chain, such as Zhonghuang Huaxiang, Zhonghuang Neolight, Tianjin Sanan optoelectronics, Liteon, Samsung High-new electro-mechanics, Clearsky, Jingming Electronic and so on.
LED development in Tianjin is late though, but the development is so fast. The Semiconductor lighting engineering R & D center in Tianjin Polytechnical University has established a new innovative mechanism-semiconductor lighting engineering R & D center (hereafter referred to as “Center”) approved by Tianjin and the Ministry of Education; and joined with more than 60 enterprise and administrative institutions to establish the semiconductor lighting engineering R & D as well as industry allay; and has accomplished the R & D as well as industry layout of all ranges of LED industry. “Center” together with other enterprise and administrative institutions has developed their own LED car headlamp which is the first kind in China and has got the approval from the 863 Plan. They adopt high luminance LED light to produce this headlamp which includes dipped headlight, high beam, position lamp, as well as turn signal lamp. On that basis, they draft and present the national standard for LED headlamp. LED development in Tianjin is late though, but it has already established the LED industry base pattern covering the whole city with Huaming industrial park, Xiqing microelectronics and high-tech industrial park as the leader, and has more than 70 matching enterprises.
Development Goal

Well develop the matching projects and leading projects; complete industry chain; increase industry groups; and improve industry clusters. Improve the construction of R & D system of the industry cluster, the standardization system of the industry cluster; agency services system of the industry cluster as well as the information system of the industry cluster. Set up special fund for LED industry development, mainly used for the construction of public technology platform, enterprise technology reform, new production development, LED and solar PV application demonstration engineering subsidy, award for high technology and management talents.

Develop LED industry in a scientific way
Light Emitting Diode) which is an energy saving industry attracts much attention from the country, local governments as well as many enterprises. The investment boom is constantly appearing. And people have different opinion about overinvestment.
What’s the global focus in the post-industrial age? There is no doubt that low-carbon, energy saving, environmental protection and sustainable development are those words that attract people’s eye. On this basis, LED does have a broad development space. The state governments such as the
National Development and Reform Commission, the Department of Industry and Information, the Ministry of Science and Technology as well as the Ministry of Education have offered great support for the development of LED industry, including investment in the project; and local governments also pay great attention on this industry. According to statistics, there are 14 provinces and cities have established semiconductor lighting industrial parks and set LED industry as a burgeoning industry.

According to the statistics from some related authorities, the investment for LED in 2009 has reached 22 billion Yuan; and there are more than 26 epitaxial wafer chip companies under construction up till now, which includes companies from the USA, Japan, Korea and Taiwan China, as well as many private capitals in China. The number of the MOCVD equipments which has been contracted and are under plan is more than 1000. On this basis, whether there is overinvestment has become the major argument. But this issue is very complicated, only if there is research data shall we make the analysis. But from the production lines of more than 20 provinces of the whole country, there is tendency that there does exist overinvestment on the LED production lines. We should learn that investment is not our real target, what we are expecting is good return. Each local place should know their advantages well, and then decide to do what and how to make that. Every industry has its own characteristics and rules; if they do not know them well, there will be some difficulty for its development, and we have to wait for a long time for the good return.
Because of the support from local governments and the fund from many parties, the LED industrial scale in our country is keeping expanding. With the constant expanding, the conflict of the industrial imbalance is very obvious: on the upstream, the percentage of chip enterprises is rather small, smaller than application enterprises. On one hand, application is of great importance for the development of our industry; on the other hand,
there does exist some problem inside the LED industrial structure.

As far as technology innovation is concerned, the technological innovative capability of LED is constantly improving. Overall, there is great distance between ours and the outland. There is an obvious characteristic in the development of our electronic information industry—the more basic the issue is, the greater the gap is; and there is no exception for LED industry. The core problem is that the material equipment is far more behind the development of the industry.

Most of the LED chips and equipments made by our country belong to the low-level or middle-level. More than 80% of the high-luminance power LED chips and devices are imported. Key devices MOCVD and epitaxial wafer substrate used in the epitaxial production, raw materials used in the packaging such as high property silica gel, epoxy and phosphor are all imported. So it is an urgent measure to accelerate product restructuring and industrial restructuring to well develop the LED industry and enterprises. Innovative capability is a process of long term accumulation, which can not be made within short time. Local places should analyze and consider these problems carefully while developing burgeoning industries.

There are many innovations and constant changes in the LED industry. The more innovations, the more opportunities, and there will be more investment attracted. As for the industrial investment, we should make careful analysis to know the industrial development well. Risk lies in capital, technology, market, intellectual property, enterprise operation and so on. We should have rational understanding about risk, and follow the development rules of LED industry, which is the key to make the industry develop in a healthy, scientific and ordered way.

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