Taiwan's LED chip maker Jingdian was affected by factors such as the industry's off-season and LED price declines in January this year. The monthly revenue was reduced by 8.59%, but it still grew by 11.52% year-on-year due to the fall of the Lunar New Year. Affected by the new capacity of the mainland, the price pressure of blue LEDs will increase this year. However, with the enhancement of Mini LED backlight/display applications and VCSEL supply capacity, the company has the opportunity to strive for stability this year.
Mini LED is one of Crystal's more promising products this year. According to the company, the main reason is that the size of the Mini LED is between 100-200μm and even larger, which can be produced with a slight modification of the existing production equipment. Although the product size, driving method, current, etc. are different from ordinary LEDs, it requires a different chip, but it can basically be solved for the company. It is expected that mass production will be supplied to backlight customers in the second half of this year, and the ultra-small pitch display using Mini LED will also be introduced in the second half of the year.
VCSEL (Vertical Cavity Transmitter) is also a new product business that will be fully developed this year. In fact, Crystal's VCSEL products have been mass-produced and supplied to data center customers, but the company continues to develop towards mobile phone sensing applications. External transmission crystal may mass produce 6å‹VCSEL wafers to the smart phone supply chain in the second quarter of this year, and chip processing may be supplied to Android customers in the second half of the year. The legal person estimates that VCSEL revenue will contribute 3% this year and 10% next year. Since the profit of VCSEL products is better than LED, the profit contribution will be higher than the revenue contribution.
Although the continued expansion of production capacity in the mainland may add to the growth of the LED industry in the next few years, according to research institutions, the annual capacity growth of mainland LEDs may reach 5% or more from 2018 to 2020. However, the outside world is still positive about the operation evaluation of Jingdian this year.
On the one hand, the impact of new LED production capacity on the mainland may be more significant in the second half of the year, but the third quarter demand season may moderately offset the pressure of supply increase. On the other hand, the development of new technologies and new products, including VCSELs, Mini LEDs and even the development of Micro LEDs, is expected to bring new kinetic energy and new opportunities to the company.
Micro LEDs and Mini LEDs are mainly distinguished by size. Below 100 μm, they are called Micro LEDs. Mini LEDs are 100-200 μm in size and even larger. They can be produced with a slight modification of existing production equipment. However, regardless of the size of the Micro LED and Mini LED, the size of the LED is much smaller than that of the general LED. The driving method is different and the current is different. It is expected that the Mini LED will be introduced into mass production this year, but it will take some time for the Micro LED to be mass-produced.
Although the price of Volkswagen's specification LEDs continued to decline, Crystal Power's active adjustment of its product portfolio last year, including the shipment of Quaternary LED and CSP chip-scale packaged LED products, led to a significant increase in gross margin last year. It is generally expected that the average LED decline may still be 10%-15% this year, but Jingdian's attention from product mix optimization should help slow down the price pressure.
In 2017, Jingdian's revenue was approximately 25.37 billion yuan (NTT, the same below), and the annual decrease was 0.66%. Due to the adjustment of product mix, the gross profit margin increased. The gross profit margin of the first three quarters was approximately 21.6%, and the annual increase was nearly 18 percentage points. The stock surplus was 1.18 yuan. Revenue in the fourth quarter fell to 6.037 billion yuan, a decrease of 13.24% in the quarter and a decrease of 4.69% in the year. The full-year profit may still be the best in the past three years. In January this year, the revenue was affected by the off-season and fell to 1.876 billion yuan, but increased by 11.5%. It is estimated to be lower in February and rise after March.
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