China's LED chip market has been in short supply in 2009 to the basic supply and demand balance in 2010. In 2011, there was an oversupply. In 2012, it was already oversupply, and it will be adjusted in 2013. Driven by downstream market demand after 2014, LED chip demand will begin to enter steady growth and the industry will undergo a major integration phase. The demand for LED chips is still growing. In 2013, the chip industry showed a polarization. The output value and resources were gathered in individual enterprises. In 2014, some small, weaker technology chip makers will become the target of mergers and acquisitions. The data shows that in 2013, the market demand for LED chip industry in China reached 8.4 billion yuan (excluding Hong Kong, Macao and Taiwan), an increase of 17. year-on-year. Among them, the demand for LED chips in China's domestic enterprises grew rapidly, from 5 billion yuan in 2010 to 2013. More than 8 billion yuan in the year. LED chip industry demand forecast After 2013, China's local government will no longer blindly support all LED chip companies, but focus on a few outstanding key enterprises. Therefore, the entire LED chip industry's capacity expansion in 2013 is very limited, only the leading companies began to seek expansion at this stage, and capacity expansion is mainly based on demand. From the perspective of listed companies, the newly added capacity in 2013 was mainly based on Huacan Optoelectronics. After the listing in 2008, Huacan Optoelectronics carried out large-scale capacity expansion; Sanan Optoelectronics' capacity for additional production expansion is expected to be in 2014. It will be produced by the end of the year LED lighting has grown rapidly in 2013-2015, and new capacity should be quickly digested by new demand. According to the data of the “2014-18 China LED Industry Market and Investment Strategic Planning Analysis Report†released by the Industrial Research Institute, the LED chip light efficiency is increased by 20-25 per year. If the price remains unchanged, the LED chip gross margin will be improved. Therefore, it is expected that LED chips will have a double increase in shipments and gross margin in 2014. It is predicted that the market scale of China's LED chips will maintain an average growth rate of 11.85 per year from 2014 to 2020. In 2020, the demand for LED chips in China will be nearly 17.5 billion yuan. It is understood that due to the shrinking profits of the LED chip industry, LED products enter a parity period, many companies hope to rely on the expansion of scale to obtain more profits, the current MOCVD capacity utilization rate in China is only about 30, the operating rate is only about 50, although the downstream lighting market demand comparison Strong, but due to years of capacity expansion, and low utilization, resulting in huge machine losses, the LED industry in the future mainly to integrate existing resources, the possibility of expanding production capacity may exist in several listed companies.