July 5, 2017: With demand for LED end devices started increasing again, LED manufacturers of China have started expanding their capacities. Local governments are also gearing up to give new subsidies and planning new investment programs to help the manufacturers. The Nanchang government in China’s Jiangxi Province has already announced new investment projects.
China-based LED manufactures like Shenzhen MTC and Shineon are all set to establish over 1,000 new production lines for LED packaging and module manufacturing. MTC is also gearing up to expand its manufacturing capacities.
China’s local governments had offered subsidies in 2009, to encourage local LED companies to expand. But unfortunately, the funds were cut sharply after the companied over-invested in capacity expansion and resulted in oversupply in the market.
However, in the first half of 2017, many China-based LED companies have started receiving subsidies from the local governments. For example, Sanan Optoelectronics has received CNY100 million (US$15.02 million) subsidy from its local government. HC Semitek has also received CNY50 million from the science park in Zhejiang. Hongli Zhihui Group has obtained CNY30 million from the Jiangxi government.
MTC has entered into a partnership with the Nanchang government to invest CNY700 million in its new LED packaging facilities. It will have 50% stake in the new facilities. The new plants with 1,000 new packaging production lines, will target backlight and lighting applications. MTC will also invest CNY1.5-1.6 billion to start new plants for LED chip manufacturing in Nanchang.
Shineon, on the other hand, will invest CNY2 billion to set up 300 LED packaging and module production lines.
With such investments in Nanchang, and with capacity expansion projects from China’s first-tier LED manufacturers, like Forest Lighting and Foshan NationStar Optoelectronics, China’s presence in the global LED lighting and LED backlight markets will grow even larger.