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High Pure Ammonia Market Dynamic:LED Epitaxial Chip Industry Is Expanding, And Where Will The Core Material Supply Chain To Go?
Dec 04, 2017

First, an overview

In the near future, the LED chip manufacturing industry moves frequently, and the major manufacturers are laying out. In June 30th, trillion Chi shares issued a notice that it had invested more than 1 billion 500 million investment to build LED epitaxial chip and chip project. In July 15th, the first phase of huaxan photoelectric Yiwu plant area was officially put into operation in July 15th. In July 17th, the dry lighting photoelectricity announcement said that it was going to invest 5 billion expansion to produce LED epitaxial chip. The tighter capacity of several rounds of chip production since 2016 has led to a rise in prices, which makes the LED epitaxial chip enterprises accelerate the pace of production.

Analysis of the reasons for the expansion of two and LED chip Enterprises

What is the reason for the rapid expansion of the LED industry? The author analyses the following factors.

1) the growth trend of overseas orders is remarkable.

2) the lighting industry is becoming more and more mature, and the demand for LED chips is rising steadily.

3) the market forecast of LED chip enterprises tends to be conservative, and the pace of expansion can not keep up with the market demand, which leads to the shortage of production capacity in 2016.

Experienced in the "investment", "excess capacity" and "underemployment rate" short industry cultivation period, from the beginning of 2016, the enterprise has the strategic vision of the large LED chip began a big expansion and layout, insiders said, the new capacity is expected in 2018 5 to June all released. When the industry will return to reason.

Three, the impact of the expansion of the chip industry on the supply chain of the supporting core materials

With the growth of industrial demand, the supply relationship between supporting core materials and supply chain is tight, which brings a wave of price rise to the recent LED industry. Due to the limited length of this paper, a key key material of LED epitaxial chip is selected to illustrate the high purity ammonia gas.

What is high pure ammonia? This material is used in the process of the key luminescent layer of gallium nitride film in blue light LED chip.  Because of high purity ammonia purification difficulty, high safety risk and high investment cost, before 2010, the high purity ammonia used in our country almost all relied on imports. Epitaxial chip enterprises were extremely passive in bargaining. After a few years, because of the China photoelectric manufacturers optimistic about the industry, have Chinese large-scale investment and construction of high purity ammonia plant, until 2015 to 2016, all capacity release, vicious competition to achieve the ultimate, "business China style" nothing, cliff price to 8 yuan / kg. The manufacturing cost is far lower than the national enterprises, survival is hitherto unknown challenge, "Metro cable" incident will not repeat in the gas industry, the risk of manufacturing LED epitaxial chip will also be triggered at any moment. According to the survey, the high pure ammonia gas in South Korea's terminal sales price is about 20 yuan / kg, in Germany is about 40 ~ 50 yuan / kg, in the United States is about 60 ~ 70 yuan / kg, in Southeast Asia is about 50 ~ 60 yuan / kg, while the foreign market is the high-end electronic chemicals should be given the price and value.

In view of the competition in China's domestic enterprises, foreign gas companies either sell ammonia plants or choose to shut down through the 2015~2016 industry shuffling. And the high pure ammonia enterprises that can survive in China present the following three characteristics:

1) Gao Chunan's purification technology is becoming more and more refined

The core features of Gao Chunan's purification technology is to remove the impurities in the traditional industrial ammonia water, according to the GB / T14601-2009, moisture content is less than 0.2ppm (photoelectron standard 0.2 ppm), the current domestic production of high purity ammonia manufacturing enterprises in the water has been stable in 10ppb (1/100000000). In the various links of high pure ammonia manufacturing, the outstanding private enterprises made in China are constantly breaking through the field of research and development, leading the technology direction of the world's high pure ammonia industry.

2) the cost of early investment is huge and the time of return on investment is long

With Chinese, industrial upgrading, environmental protection and safety requirements more stringent, the corresponding laws and regulations increasingly perfect, invest in a high purity ammonia purification plant construction project for the corresponding period and the construction cost is more and more high. The industrial development is more and more mature, the price system tends to be stable, the profit of the industry returns to rational, its return cycle is about 5 years.

According to the analysis, the production cost of super pure ammonia is about 12~13 yuan per kilogram in China. The following table shows:

Serial number

Cost composition project name



Industrial ammonia raw materials (utilization ratio 75%)

4000 yuan / ton


Labor cost + electricity bill

2000 yuan / ton


Financial cost and management cost

2000 yuan / ton


Transportation cost + equipment depreciation

2500 yuan / ton


Examination and approval of the annual inspection fee

2500 yuan / ton


13000 yuan / ton

According to the profit calculated from 8% to 10%, the price should be 14~18 yuan / kg (according to the scale of the enterprise). Too low or too high is a bad competition, which will damage the normal development of the industry and hinder the progress of the national industry. Such as bottled gas 18~24 yuan / kg.

3) Gao Chunan production unit is a major risk source, and the risk of enterprise operation safety is high.

According to the identification of hazardous chemicals major hazard installations, GB18218-2009, toxic gases: 2.3 other hazardous gases which are dangerous are more than the standard critical volume, which constitute a major hazard. According to the "list of dangerous goods" GB12268-2005XG1-2007 - anhydrous ammonia dangerous No. 1005th belong to 2.3 other toxic gases, "chemical classification, warning labels and warning that safety regulations" GB50292-2006 determine the acute toxicity of ammonia, acute poisoning hazard categories into 4 categories (3 kinds of LD50 300mg/kg by mouth than ammonia LD50 350mg/kg rats is less than 5 types of LD50 5000mg/kg). As a result, liquid ammonia is a major risk source. CN number 22003. A lot of accidents have been made at the same time, and a lot of costs have been paid at the same time. According to the safety law, it is clearly stipulated in the heavy casualties.