Business Weekly: Guo Taiming and Li Yuyao sharpening the knife to the LED

This article was transferred from the March 29th edition of the "Business Weekly", author Lin Yizhen.

On March 29th, March 18th, 2010, Innolux and Chimei Electric formally merged; that is, from this time, Hon Hai’s Chairman Guo Taiming and AUO Chairman Li Yongyao opened another battlefield. .

On this day, all the front-line supervisors of Innolux and Chimei Electric gathered in the group to create a bamboo south factory, led by Duan Xingjian, the general manager of Xinqimei, and opened the first cadre meeting after the new Qimei became a military.

At the end of the meeting, everyone cheered together! Come on! Come on! Even in the hall a few meters away, you can hear it. For the future challenges, Duan Xingjian said, very excited! Not tired at all!

Both sides grab the key puzzle!

Fighting for the leading faucet, winning the LED supply chain

However, to preserve the throne of the first panel factory in Taiwan, Xinqimei still lacks a piece of puzzle.

The scene was pulled back a month ago, Taipei's small dome, Hon Hai's annual tail scene, the seating arrangement is often the best indicator for interpreting the performance of different business groups in the group in the year, can also be seen in Guotai In the heart of the heart, it is light and heavy.

This year, I was hand-picked by President Guo and the first row of guests in front of the stage. It is not the largest PC embedded business group, but the Japanese LED (light-emitting diode) manufacturer Nichia.

Why does Guo Taiming need Nichia?

According to estimates by the Tuoba Industrial Research Institute, the LED backlight penetration rate of notebook computer panels will reach 95% next year, the display penetration rate will reach 8%, and the TV penetration rate will be close to 10%. These figures represent up to 180 million LED notebooks, monitors and TV panels and business machines.

In other words, Hon Hai, who is actively attacking the TV assembly market, and Innolux, who is ready to get rid of TPV’s display OEM, if there is no such small, bright LED, like a gun in the hands of a sharpshooter. Without bullets, no matter how good it is, it is impossible to hit the target.

The Japanese-Asianization with patented LED technology was regarded by Guo Taiming as the most important guest, because this is the biggest gap in the supply chain of the new Qimei.

Li Yuyao ducks paddling!

Dig the angle talent first, then vertically integrate and reduce costs

But the most important key puzzle of this panel factory, Li Yuyao completed the construction of AUO earlier than Guo Taiming.

Just three days before the official merger of Xinqimei, Li Lanyao's LED supplier Longda Electronics, which was built by AUO Group, was officially merged with Kaiding Technology. The merged new Lunda Electronics will have the LED upstream epitaxial and downstream packaging capacity, and become the small crystal electric plus billion light in Taiwan's LED industry.

The AUO army led by Li Yuyao entered the LED packaging factory Kaiding in the past six years, and established the epitaxial plant Longda Electronics in the previous year. He silently cut into the LED field and fostered his own technical corps.

Although LED is a hot area, because Taiwan started late, there are not many talents. Li Yaoyao’s approach is to dig corners. From Jingdian, TSMC to UMC, it is the object of his hunters.

Since crystal power has been established for a long time than other Taiwanese epitaxial plants, the experience of adjusting MOCVD (organic vapor deposition) machines is the most abundant. On the other hand, LEDs also use the semiconductor process of fabs, so TSMC , UMC, has also become the object of the LED factory to dig corners.

At the beginning of Ronda's establishment, AUO recruited Tang Xiumu, a blue light technology expert from Jingdian. He was one of the founders of Yuan Arsenic Optoelectronics and one of the few talents in Taiwan who have invested in high-brightness LED research and development.

In order to rob people, the Ronda, which has not yet been listed, has been used by TSMC and UMC for more than a decade. The director of an epi-plating factory is not arrogant. The main reason for senior talents to be willing to take the knife is that it is now The stock of ten Taiwan dollars may have a potential of 20 times in the future after listing, and it can be said that it is the last wave of opportunities for new technology.

Ronda, which started to build capacity last year, currently has about 27 MOCVDs for epitaxial use. An industry source pointed out that in the next six months, Ronda will have a new machine station every month, and by the end of this year there will be an opportunity to expand to 100 units, almost half of the production capacity of crystal power.

After Innolux announced the merger of Chi Mei, Li Zhaoyao accelerated the aligning action of AUO's LEDs. At the end of December last year, Lunda and Kaiding were merged. During the same period, AUO Resources was poured into the development of Lunda.

Since the patented technology of LED is in the hands of the US and Japan, the die produced by Ronda still has patent considerations. Therefore, the products of Ronda are shipped together with the AUO panel, and AUO is an international-level panel factory. The certification, Ronda can avoid the patent mines of the US and Japan LED factories.

AUO vertically integrates the supply chain and masters LEDs from epitaxial, packaged, and backlight modules to downstream panels and TV assembly, bringing the cost reduction space to the limit and strengthening the competitiveness of Hon Hai.

Li Yuyao ducks draw water, and now AUO began to show the strength of LED. A local brokerage researcher said that everyone would have joked before, saying that Ronda is really good and has no good performance. The result is really scary in January of this year.

Ronda, which had almost no shipments, started this year, and cooperated with AUO to produce LED TVs for mainland Chinese brands. In January, shipments were 40,000 units, 50,000 units in February, and shipments in March reached as high as ten. Ten thousand, double growth.

Guo Taiming came to the top!

First alliance with the factory, and then cultivate the component factory

However, Guo Taiming's development of LED is actually no slower than Li Lanyao. Hon Hai first set up Pei Xin Semiconductor to enter the LED streetlight market nine years ago, and later participated in the private development of LED packaging factory advanced development of optoelectronics. However, both of these investments have been driven to the iron plate. Advanced Power and Pei Xin have not only lost money for years, but the advanced power has even cancelled the listing.

Self-investment is unfavorable. Guo Taiming has made the best strategy of Hon Hai in the past - alliance and mergers and acquisitions. His number one goal is to launch a patent infringement war against domestic LED companies.

Established in Japan for more than 50 years, it has developed the world's first blue LED, which is the leader of LED die and the backlight of mobile phone backlight.

Guo Taiming plans to develop the optoelectronics from the LED packaging factory invested by Hon Hai to assist Japan and Asia to expand the plant. The two parties agreed that Hon Hai will provide Japan Yahua to ensure the purchase volume, so that Japan's Asianization will not lead to oversupply of its own LED chips due to the increase in production capacity, and Hon Hai can also get enough raw material support.

Thanks to the support of Nichia, Innolux is able to obtain a large number of high-quality crystals, and the quotation is comparable to that of traditional CCFL LCDs, attracting first-line brands to place orders. The OEM has surpassed TPV to become the world's largest.

Here, it is the divergence between Guo Taiming and Li Zhaoyao in the LED war strategy. Due to the complexity of LED patents, once the infringement lawsuit is encountered, it is likely that the TV and display products assembled by Hon Hai will not be able to be shipped. Therefore, for Guo Taiming, who is a system manufacturer, the LED supply will be more integrated than the integration of its own LED supply chain. important.

Therefore, even if Guo Taiming bought Chi Mei Electric, and obtained the Chi Mei Technology and LED packaging factory Qi Yao Optoelectronics, the two companies did not merge as expected, and embarked on the consolidation logic of Ronda Electronics.

In the future, Kelly will focus on epitaxial, and enlighten the focus package. Qi Yao, general manager Ding Jinglong stressed that since LED packaging and terminal applications are highly relevant, Qi Yao will develop a variety of differentiated packaging technologies in the future. The more diverse the product needs.

Guo Taiming's abacus is, on the one hand, to support Qi Li and Qi Yao in the group to supply LED demand for future low- and medium-end products; secondly, high-end products use Japanese-Asian and advanced development of photoelectric LED.

The war is burning to the stock market !

Fundraising ability affects future talent and capacity war

In this LED war, Li Xiaoyao's thinking about the vertical integration of the panel factory, the system manufacturing thinking of the key component factory of Shang Guotai, the LED dispute between the two groups fell behind in the supply chain, and now it has hit the capital market.

Qi Yao just logged into Xing cabinet in February, and Ronda then sent an application for the counter in March, and the battlefields of both sides extended to the stock market. Because the stock market represents the ability to raise funds, it is related to the future LED capacity expansion and talent struggle, and will affect the development of Taiwan's LED industry.

Further reading: LED Group fights to seize the opportunity of lighting

In October last year, in the cover story of Business Week, electric vehicles, LED century revolution, we have reported that LED will be the protagonist of the next century of battle, and will inevitably move toward a large-scale consolidation war.

Observing the layout of Hon Hai and AUO, it is indeed confirmed that LED will also move toward the trend of the larger Evergrande Group. In the future, independent epitaxial and packaging factories such as Jingdian and Yiguang will have to adjust their business models and make themselves It will not be marginalized as the group develops its own supply chain. As for Hon Hai and AUO, we cannot ignore the competitiveness of new rivals such as TSMC. In fact, TSMC has even obtained more LED patent layouts than the former two, and its strength is strong.

In the short term, LEDs will be the first popular application in the market, but include big factories such as Hon Hai, AUO, TSMC and UMC. The bigger goal is that the business opportunity is as high as NT$66 trillion. In the market, as governments set a timetable for banned incandescent bulbs, the LED lighting market will take off. By then, the LED war between the groups will be officially heated.

Further reading: Hon Hai's big bang - two groups of LED layout

Project: Raw material (sapphire substrate)

Hon Hai Group: Xin Jing Drill, Zhao Jing

AUO Group: None

Project: upstream (elevation), midstream (cutting, provocation)

Hon Hai Group: Nichia Chemical (Allied), Keli Optoelectronics

AUO Group: Ronda

Project: Downstream (package)

Hon Hai Group: Advanced development of optoelectronics, Kai Yao

AUO Group: Ronda

Project: Assembly (backlight module)

Hon Hai Group: Qi Ling

AUO Group: Fu Xiang, Nip

Project: Terminal Application

Hon Hai Group: Hong Zhun, Pei Xin, East Asia Optoelectronics

AUO Group: Power League, Jia Shida

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