MOCVD subsidies "dark war" series of reports: a new round of settlement

[High-tech LED reporter Zhao Hui] "The price is high." This is the highest rule that the auction industry follows.

This time, in the battle for the 100 pieces of MOCVD where the domestic LED chip "One Brother" Sanan Optoelectronics (600703.SH) landed, the "high price winner" was also implemented, and Xiamen won the price of 4 billion yuan. 300 MOCVD of Sanan Optoelectronics settled, leaving only the lost and unwilling back of Wuhu.

Behind all of this, domestic local governments are vying for the driving of the LED epitaxial chip production line, especially the rise of the new round of development of the LED lighting industry at the end of last year.

As the most demanding technology in the entire LED industry chain, epitaxial chips have always been regarded as high-tech and high value-added industries, and have naturally been welcomed by local governments.

The field of domestic LED epitaxial chips has been gradually developed since 1999. According to the statistics of the High-tech LED Industry Research Institute (GLII), the number of LED chip companies in China was only three in 1998. By the end of 2008, the number of Chinese LED chip companies It has reached 43 and the average annual increase is about 4, and the period from 1999 to 2008 was a period of stable development of China's LED upstream industry. The beginning of 2009 is the golden time for the growth of China's LED chip companies. The number of enterprises has increased from 43 in 2008 to 95 in 2011.

The driving force behind this golden growth period that began in 2009 was the massive investment in capital markets and the huge MOCVD subsidies that local governments began.

â€œThe government subsidy for MOVCVD began in 2009, and the earliest subsidy city was Yangzhou, Jiangsu.â€ Zhang Hongbiao, research director of the High-tech LED Industry Research Institute (GLII), said that the entire market began to break out in 2009, and social resources and funds entered. Promoted the leap-forward growth of the LED chip industry.

The reporter found that Yangzhou, which was the earliest subsidized by MOCVD, has attracted a large number of enterprises including Ganzhao Optoelectronics, Dehao Runda, Longyao Optoelectronics, Zhenmingli, and Yangyang Optoelectronics to plan to invest in LED epitaxial chip production bases in the city. It is planned to introduce hundreds of MOCVD units.

Affected by this, other cities in China including Wuhu and Huai'an quickly followed up and showed their respective subsidy policies. The amount of subsidies ranged from 8 million to 10 million per unit.

In addition to the subsidy, the accompanying municipal street lamp contract and public lighting renovation project has become one of the tools for the local government to compete for MOCVD.

The 200 MOCVD of Sanan was spent in Xiamen. Although the subsidy of 5 million yuan per unit is not high in each city, the additional 3 billion yuan lighting application contract is the biggest red envelope.

Some local LED industry insiders believe that Sanan Optoelectronics will put 200 MOCVD production bases in Xiamen. In addition to the favorable conditions given by Xiamen City, Sanan Optoelectronics has the opportunity to carry out public lighting from Fujian Province. Benefit from the renovation project.

According to GLII, most local governments believe that only the introduction of LED chip companies can become a true LED industry base, and the function of the LED upstream epitaxial chip industry has been myth. MOCVD subsidy policies in various cities are the main driving factors for the rapid growth of MOCVD in China.

This also directly led to the end of 2013, the domestic MOCVD machine has reached 1017 units.

According to GLII data, in 2012, China's MOCVD capacity utilization rate was only about 30%, and the operating rate was only about 50%. Driven by the demand in the downstream lighting application market, the capacity utilization rate of China's epitaxial chip companies increased significantly in 2013. The MOCVD capacity utilization rate rose to 52%, and the operating rate also rose to around 70%.

In terms of price, the price of LED chips dropped by more than 30% in 2012. The average revenue and net profit of LED epitaxial chip listed companies in 2012 showed a downward trend.

Although the price of LED chips in 2013 has tended to be flat, the price at the end of the year has dropped by nearly 20% from the beginning of the year. The performance of chip companies in 2013 is also not optimistic.

Comparison table of MOCVD subsidy policies of various local governments in China since 2010

city MOCVD subsidy amount MOCVD subsidy fund disbursement principle Binding regulations
Yangzhou Red and yellow light MOCVD subsidy fund 8 million yuan / Taiwan blue green light MOCVD subsidy fund 10 million yuan / Taiwan The subsidy fund is paid in three installments:
40% after the equipment arrives at the factory
30% of the equipment is put into operation after normal production
30% after mass production and sales.
1. Subsidize funds for new or expanded investment projects with more than 5 new MOCVD equipment (including 5 units) for the production of LED epitaxial wafers. 2. The MOCVD purchased has reached the international advanced level (blue-green MOCVD 31-chip machine and above, red-yellow MOCVD 38-chip machine and above). 3. During the depreciation period of the equipment, if the enterprise moves out of the city or transfers the equipment to a third party, the city will have all the property rights of the net value of the equipment. 4. Yangzhou plans to cancel subsidies for projects signed after July 2011
Jiangmen Red and yellow light MOCVD38 tablet machine and above subsidy fund 8 million yuan / Taiwan blue green light MOCVD31 piece to 44 piece machine subsidy capital 10 million yuan / Taiwan blue green light MOCVD45 piece to 55 piece machine subsidy 11 million yuan / Taiwan blue Green light MOCVD55 tablet machine and above subsidies 12 million yuan / Taiwan In principle, the subsidy funds are disbursed three times:
40% of the equipment will be paid within 10 working days after the equipment has passed the acceptance test.
30% of the equipment will be paid within 10 working days after successful trial production
30% of the equipment will be reissued within 10 working days after the equipment is officially put into production. 1. The beneficiary enterprise shall ensure that the investment and construction of the project are completed in accordance with the investment intensity and progress as stipulated in the investment contract. Otherwise, the preferential treatment shall not be enjoyed, and the concessions already enjoyed shall be refunded in full. 2. After the project of MOCVD subsidy project is established, the park should track, supervise and inspect the project as a whole. Within 10 years, if the beneficiary enterprise moves out of the park, or transfers, donates, leases the equipment to a third party and moves away from the park, the beneficiary enterprise shall return all equipment subsidies to the park.
Chengdu Shuangliu County The blue-green light MOCVD subsidy fund is 10 million yuan/set. Subsidy Disbursement: MOCVD equipment subscription contract is scheduled to be paid in advance, and the total amount is not more than the total amount of actual investment (excluding land) that the company has invested in.
The equipment is allocated 90% of the MOCVD equipment after the acceptance of the supplier's premises and the completion of the packaging and delivery preparation.
After the equipment is successfully tested, 10% will be paid. 1. Subsidize the new or expanded investment projects of more than 5 (including 5) new MOCVD equipment (Specifications: Blue Green MOCVD 31 and above) for one-time purchase of LED epitaxial wafers. 2. Effective scope of MOCVD fund subsidies: The upper limit of subsidy equipment is 50 MOCVD, and the maximum subsidy amount is not more than 500 million yuan.
3. Fixed assets that have been subsidized shall not be transferred or leased within 10 years, otherwise our county has the right to recover the subsidies that the enterprise has already enjoyed. 4. The total amount of individual project support does not exceed 50% of the actual investment of the enterprise. 5. Support funds cannot be used for project registration
Wuhu Red and yellow light MOCVD subsidy 8 million yuan / Taiwan blue green light MOCVD subsidy 10 million yuan / Taiwan Red and yellow light MOCVD, limited to 38 pieces and above blue and green MOCVD, limited to 31 machines and above
Hangzhou When purchasing MOCVD equipment, relevant companies can enjoy local financial subsidies of 40% of the purchase price of equipment.
Wuhan The same high purchase subsidies as in other regions give MOCVD a purchase subsidy of 8 million yuan to 10 million yuan each.
Jiujiang Red and yellow light MOCVD subsidy 8 million yuan / Taiwan blue green light MOCVD subsidy 10 million yuan / Taiwan Referring to the national LED development policy and regional support policies, the development zone may consider purchasing no less than 5 MOCVDs (blue-green MOCVD 31-chip and above, red-red MOCVD 38-chip machine and above), blue-green MOCVD subsidies The funds can reach 10 million yuan / Taiwan, and the red and yellow light MOCVD subsidy funds can reach 8 million yuan / Taiwan.
Huizhou Blue-green light MOCVD subsidy fund 8 million yuan / Taiwan red yellow MOCVD subsidy fund 5 million yuan / Taiwan to achieve MOCVD equipment localization, subsidy standards increased by 50%. One-time purchase of new MOCVD equipment for LED epitaxial wafer production (Specifications: blue-green MOCVD 31-chip machine and above, red-red MOCVD 38-chip machine and above) 3 or more (including 3) new or expanded investment projects by high-tech The district finance gives financial subsidies.
Xiamen Torch Development Zone Single equipment (converted by 2 inches and 54 pieces) Pay in installments with the progress of the project company's payment The maximum subsidy is 200 units.

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city	MOCVD subsidy amount	MOCVD subsidy fund disbursement principle	Binding regulations
Yangzhou	Red and yellow light MOCVD subsidy fund 8 million yuan / Taiwan blue green light MOCVD subsidy fund 10 million yuan / Taiwan	The subsidy fund is paid in three installments: 40% after the equipment arrives at the factory 30% of the equipment is put into operation after normal production 30% after mass production and sales.	1. Subsidize funds for new or expanded investment projects with more than 5 new MOCVD equipment (including 5 units) for the production of LED epitaxial wafers. 2. The MOCVD purchased has reached the international advanced level (blue-green MOCVD 31-chip machine and above, red-yellow MOCVD 38-chip machine and above). 3. During the depreciation period of the equipment, if the enterprise moves out of the city or transfers the equipment to a third party, the city will have all the property rights of the net value of the equipment. 4. Yangzhou plans to cancel subsidies for projects signed after July 2011
Jiangmen	Red and yellow light MOCVD38 tablet machine and above subsidy fund 8 million yuan / Taiwan blue green light MOCVD31 piece to 44 piece machine subsidy capital 10 million yuan / Taiwan blue green light MOCVD45 piece to 55 piece machine subsidy 11 million yuan / Taiwan blue Green light MOCVD55 tablet machine and above subsidies 12 million yuan / Taiwan	In principle, the subsidy funds are disbursed three times: 40% of the equipment will be paid within 10 working days after the equipment has passed the acceptance test. 30% of the equipment will be paid within 10 working days after successful trial production 30% of the equipment will be reissued within 10 working days after the equipment is officially put into production.	1. The beneficiary enterprise shall ensure that the investment and construction of the project are completed in accordance with the investment intensity and progress as stipulated in the investment contract. Otherwise, the preferential treatment shall not be enjoyed, and the concessions already enjoyed shall be refunded in full. 2. After the project of MOCVD subsidy project is established, the park should track, supervise and inspect the project as a whole. Within 10 years, if the beneficiary enterprise moves out of the park, or transfers, donates, leases the equipment to a third party and moves away from the park, the beneficiary enterprise shall return all equipment subsidies to the park.
Chengdu Shuangliu County	The blue-green light MOCVD subsidy fund is 10 million yuan/set.	Subsidy Disbursement: MOCVD equipment subscription contract is scheduled to be paid in advance, and the total amount is not more than the total amount of actual investment (excluding land) that the company has invested in. The equipment is allocated 90% of the MOCVD equipment after the acceptance of the supplier's premises and the completion of the packaging and delivery preparation. After the equipment is successfully tested, 10% will be paid.	1. Subsidize the new or expanded investment projects of more than 5 (including 5) new MOCVD equipment (Specifications: Blue Green MOCVD 31 and above) for one-time purchase of LED epitaxial wafers. 2. Effective scope of MOCVD fund subsidies: The upper limit of subsidy equipment is 50 MOCVD, and the maximum subsidy amount is not more than 500 million yuan. 3. Fixed assets that have been subsidized shall not be transferred or leased within 10 years, otherwise our county has the right to recover the subsidies that the enterprise has already enjoyed. 4. The total amount of individual project support does not exceed 50% of the actual investment of the enterprise. 5. Support funds cannot be used for project registration
Wuhu	Red and yellow light MOCVD subsidy 8 million yuan / Taiwan blue green light MOCVD subsidy 10 million yuan / Taiwan		Red and yellow light MOCVD, limited to 38 pieces and above blue and green MOCVD, limited to 31 machines and above
Hangzhou	When purchasing MOCVD equipment, relevant companies can enjoy local financial subsidies of 40% of the purchase price of equipment.
Wuhan	The same high purchase subsidies as in other regions give MOCVD a purchase subsidy of 8 million yuan to 10 million yuan each.
Jiujiang	Red and yellow light MOCVD subsidy 8 million yuan / Taiwan blue green light MOCVD subsidy 10 million yuan / Taiwan		Referring to the national LED development policy and regional support policies, the development zone may consider purchasing no less than 5 MOCVDs (blue-green MOCVD 31-chip and above, red-red MOCVD 38-chip machine and above), blue-green MOCVD subsidies The funds can reach 10 million yuan / Taiwan, and the red and yellow light MOCVD subsidy funds can reach 8 million yuan / Taiwan.
Huizhou	Blue-green light MOCVD subsidy fund 8 million yuan / Taiwan red yellow MOCVD subsidy fund 5 million yuan / Taiwan to achieve MOCVD equipment localization, subsidy standards increased by 50%.		One-time purchase of new MOCVD equipment for LED epitaxial wafer production (Specifications: blue-green MOCVD 31-chip machine and above, red-red MOCVD 38-chip machine and above) 3 or more (including 3) new or expanded investment projects by high-tech The district finance gives financial subsidies.
Xiamen Torch Development Zone	Single equipment (converted by 2 inches and 54 pieces)	Pay in installments with the progress of the project company's payment	The maximum subsidy is 200 units.