“We have been focusing on the early and growing investment that we are best at,†said Peng Shichen, managing director of China Economic Cooperation Group China.
When more and more VCs expanded their fund size and participated in the auction of mid-to-late projects, WISCO announced in 2009 that it would take the lead in investing in Kai-Fu Lee's innovative workshops and extend its reach to earlier angel investments. This year, WI Harper introduced the US Xuming Optoelectronics into the mainland to set up a factory and announced the investment in the US core, which made its layout in the LED industry reveal the tip of the iceberg. The early investment strategy of “from point to chain†and “from chain to face†Initially emerging.
Xuming Optoelectronics Co., Ltd. is located in Foshan, Guangdong Province. The high-brightness LED chip factory, Xu Rui Optoelectronics, completed the groundbreaking ceremony at the end of February this year. Upon completion, it will be the first domestic joint venture with foreign upstream chip technology and more than 50% of Sino-owned joint ventures. .
“Despite the large domestic semiconductor lighting market, most of the output value is in the downstream application and packaging field, and the output value of the chip end is relatively low. Xuming Optoelectronics brings the upstream chip manufacturing to the domestic market, which has laid a considerable foundation for the independent research and development of the upstream LED industry in China. A good foundation, Peng Shichen talked about this matter, quite proud. In the market boom of “making quick moneyâ€, we are still obsessed with the process of “discoveryâ€, “explore†and “development†in early investment. In addition to the expectation of high returns, the sense of accomplishment leading the industrial development is also one of the reasons. Today, the core technology of China's TD-SCDMA standard is developed by the company we invested in that year. This is China's own wireless communication technology standard."
Discover: LED lighting market opportunities
WISCO's layout for high-brightness LEDs began in early 2006 and began with the application of MEMS in LED packaging. At this point, the market has just begun to discuss the application of LED in the TV backlight panel, and the WI-FI has begun to “fall and lay†in the LED lighting market.
“We are investigating emerging industries every year. The focus on LEDs started very early, but in 2006, we were more concerned about the semiconductor lighting market. At that time, the output of low-power LEDs was already huge, and investing in low-power LEDs was already Red Sea. Our research found that LED lighting is the most advantageous.†Peng Shichen listed a series of numbers. “LED lighting is 10 times lighter than ordinary light bulbs, and life expectancy is 30 times that of ordinary light bulbs. The same brightness can be used. According to the statistics of the National Development and Reform Commission, if all the incandescent lamps in the country are replaced, we can save more than 480 billion kWh a year. LED lighting has a huge contribution to the country's green light source and energy saving. LED as a light source, its energy saving, environmental protection and long life three characteristics have attracted the attention of China Economic Cooperation.
According to the analysis of the Center for Industrial Economics (IEK) of the Taiwan Industrial Technology Research Institute, the global lighting market will grow to $132 billion by 2011. At present, the proportion of LED lighting in the global lighting market is still low. In 2007, the global LED lighting market was about US$330 million, a growth rate of 60% compared with 2006. In 2008, the global LED lighting market was about US$400 million, also compared to 2007. It is about 21% growth. In early February 2009, NextGen Research, a research arm of ABI Research, pointed out that the global solid state lighting (SSL) market is expected to exceed 33 billion US dollars in 2013. According to NextGen's estimation, the average compound annual growth rate (CAGR) of the lighting products category in the LED market will approach 22% during 2009-2013.
China has successively formulated and launched the "863" program, green lighting project, semiconductor lighting project, and "Ten Cities and Ten Thousands" semiconductor lighting application demonstration project. Taking the “Ten Cities and Ten Thousand†semiconductor lighting application demonstration project as an example, the LED lighting demand created by it will be 1 million, 2 million, 3 million, and 5 million 2009 in 2009-2012. The project is also planned to bring semiconductor lighting into the 30% general lighting market by 2015.
Zhongjinghe is convinced that the LED lighting market has broad prospects for development and starts to look for investment entry points. “The whole industry chain needs to be developed, and there must be some key links to solve problems. This is the direction we are pursuing.â€
Discover: Find the key links
In Peng Shichen's view, LED lighting has four key problems: one is the high cost of LED chips; the other is LED heat dissipation; the third is driving efficiency, and the fourth is LED chip testing. "These four problems are not solved, and the LED industry will be difficult to develop rapidly. Our goal is to find a leading company that can solve these problems."
In response to the first question, WI Harper went through a global survey and found Xuming Optoelectronics, a company that makes LED high-brightness wafers. "Traditional wafers use sapphire for substrates, and Xuming Optoelectronics uses metal alloys, which cost more than 3 or 40% less than sapphire. This reduces the cost of wafers." The investment completed at the end of 2007 was in the middle of the economy. The layout on the LED industry chain is significant. After one year of follow-up research, WI Harper also won the recognition and affirmation of its Simplot family, its largest shareholder. Xuming Optoelectronics chips have been mass-produced and profitable, with customers all over the world.
In order to solve the heat dissipation problem, WICC has found a new strong photoelectric for LED cooling system and lighting platform. In addition to the module for heat dissipation, Xinqiang Optoelectronics is also the industry standard in this field. In 2007, Xinqiang Optoelectronics' first capital injection came from China Economic Cooperation, and it gained rapid development. It was the first company to achieve profit and loss in this professional LED product sales last year.
In response to the driving efficiency issue, WISCO invested in the company. Founded in 2008, Maximus provides high-efficiency LED driver chips and power management chips for LED general illumination, LCD backlighting, and home appliances. “Mexico is built by a group of returnees and has a good simulation. Circuit design capabilities, their driver chip is very efficient, can reduce the heat of the LED, improve the brightness and life of the LED chip."
Wafer testing is critical in the process of converting LEDs from general decorative functions to professional lighting functions. “Only highly professional testing and improvement can pass consumer inspections and meet industry-grade quality.†China Economic Cooperation chooses to invest in Taiwan leadership. Crystal Electronics, one of the wafer testing companies. Founded in 2007, Crystal Electronics is engaged in the testing and optimization of LED chips and integrated circuits. In February 2010, WI Harper's capital injection made Crystal Electronics out of its parent company, Taiwan Maomao Electronics, becoming an independent entity.
While exploring these companies, China Economic Cooperation will often introduce or find cooperation and alliances of important industry companies in a short period of time. For example, invest in Xinqiang Optoelectronics with Fusheng Group and find industrial partners for Maxim. Before the investment company is not mature, it will prepare a complete market, channels and customers to assist in the development and positioning of the company's products.
Industrial chain investment to industrial layout
Taking these key links as the core, WI Harper has invested in a large number of enterprises in the upstream and downstream of the LED lighting industry chain. It constitutes a complete industrial layout (see Figure: The industrial layout of WI Harper in the new generation of lighting).
Cross-regional resource integration plays an important role in the process of developing from “industry chain investment†to “industrial layoutâ€.
The three offices of WI Harper are located in San Francisco, Taipei and Beijing. They use the grasp of global technology trends and understanding of leading enterprises around the world to rationally allocate resources and play a "bridge" role. Strategy.
Peng Shichen takes Xuming Optoelectronics as an example. “This is an American company with advanced technology. After we invested in it, we transferred its production (R&D, manufacturing) to Taiwan. We understand the scale of LED lighting application market in mainland China. It is huge, and it is relatively weak in the field of upstream chip design, so it has been introduced to mainland China to help China establish independent research and development of LED chip technology."
Another typical example is Megumi. "Mexico is a design company for lighting driver ICs. The driver IC design is relatively strong in the United States. The domestic foundation is not enough. The two founders of Mickey are back from Silicon Valley. In the United States, we have accumulated considerable power management and driving lighting technology. We bring advanced foreign technology to China and use the relatively low labor cost in China to do chip design to assist the development of the domestic LED lighting market."
The global layout of Xinqiang Optoelectronics is from Taiwan. WISCO helps its rapid landing in mainland China and helps it open its market awareness in the United States. After the steady growth of Taiwan, Crystal Electronics will gradually expand its market along with the layout of China Economic Cooperation in China.
"The whole LED industry, chip technology research and development, the United States, Japan is the strongest. Commoditization, packaging and cost reduction, Taiwan is the most competitive. But the manufacturing capacity is the strongest in mainland China, and the market is also the largest in mainland China." Peng Shichen pointed out that "investment Must have a global vision, have a full understanding of the competitiveness of each industry in different regions of the world, and then know how to allocate resources, let enterprises develop in suitable regions, and ultimately play the competitive advantage of enterprises in the global market, and It is not just a competitive advantage in a region. The international platform of WI Harper has a lot of help for us to understand the trend of technology and to find projects."
In Peng Shichen's view, such resource allocation and industrial layout means that long-term industrial research, international platform construction and in-depth local development of investment institutions are the result of patient cultivation. For China Economic Cooperation, in the case of a number of invested LED companies have achieved profit or loss or even profit, LED lighting market is about to enter the rapid growth period, the harvest days are not far away.
Note: LED lighting chips account for about 70% of the industry's profits, LED lighting packaging accounts for about 10% to 20% of industry profits, LED lighting applications account for about 10% to 20% of industry profits. The structure of China's LED lighting industry development focuses on packaging and downstream applications. The output is the world's number one and the output value ranks second in the world. According to the statistics of the National Development and Reform Commission, the total output value of China's semiconductor lighting in 2008 was nearly 70 billion yuan, of which the chip production value was 1.9 billion yuan, the package output value was 18.5 billion yuan, and the applied product value was 45 billion yuan. The ratio of chip, package and application output value It is 1:9:22.
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