Jinshajiang venture capital optimistic about the upstream LED substrate material

The dreamer never sleeps. One of the founders of Jinshajiang Venture Capital, Wu Shenjun, may be one of them. In an extremely ordinary office at Tsinghua Science Park, he is conceiving to create a global lighting empire.

For Wu, this is not unbelievable. "GE was born because of a small light bulb."

Wu Shenjun hopes to seize the opportunity for a new round of lighting revolution. LED (Light Emitting Diode) may completely replace the traditional incandescent lamp, becoming the only protagonist on the lighting stage. Wu and his led Jinsha River have invested in 8 LED companies, including every link in the industry chain. "Whether it's GE, Cree, or Philips, I'll put all my competitors on the ground." He waved his hand and was very satisfied.

The Jinsha River Venture Capital currently manages a $700 million fund, but his empathy does not come from this, but from a group of companies with "subversive technologies" he invests in. These companies will sell LEDs for $10 apiece and the price will continue to fall, while peers may charge €30. Reducing costs is the main driving force for the development of the LED industry. Companies that have taken the lead in realizing this will be able to enjoy the prosperity of the industry.

Although Wu Shenjun has no doubt about the cost advantage, he has been told by reporters that this advantage can only be reflected in some products and it is far from the “unified rivers and lakes”. Wu Shenjun also said that the competition for the market between them and European and American companies has only just begun, and competitors based in Asia are already conducting similar core technologies.

Not long ago, in Changzhou, Jiangsu, the signing ceremony for the Jinshajiang Semiconductor Lighting Industrial Park was just completed. According to the agreement, a LED R&D and manufacturing base with a total investment of nearly US$200 million will be located in the local development zone, and the R&D center will be built by Jinshajiang Ventures. Wu Shenjun hopes to build it into China's "Bell Laboratories" and focus on the world's best LED talent. He believes that this is the key to whether the Jinsha River can continue to lead the next round of competition.

"Subversive"

LED is one of the most imaginative space for energy conservation and environmental protection investment. If the existing lighting market is completely replaced with LED, its potential size will reach 300 billion US dollars.

However, it is difficult for enterprises in the Chinese mainland to take a share of this. At present, Japan, the United States, and European companies represented by Nichia, Osram, and Cree are the first camps, and they dominate the LED lighting market. Taiwan and South Korea are in the second camp. Their technology is second to none. They are still in a breakthrough stage in the field of lighting. They mainly supply consumer electronics backlight LEDs. Due to the decentralized scale and backwardness of technology, mainland enterprises are only focusing on low-end markets such as landscape decoration, sign advertising, and outdoor large-screen displays. The Jinsha River must change the rules of the game through the power of capital.

Wu Shenjun focused his attention on the most lucrative upstream segment. Similar to the photovoltaic industry, LED industry in the early stage of growth has monopolized most of the profits from the upstream, and up to 70% of the upstream companies in the industrial chain that account for less than 20% of the profits. Among these, the development of substrate materials that affect the industrial technological route is the hub of all aspects of technology.

Wu Shenjun called the Japanese-American trump card is a company called Jingneng Optoelectronics. The company uses silicon as the substrate for the production of chips, taking a new technological route, while reducing the cost of materials, it can also bypass the patent walls of Japan and Cree. Wu Shenjun believes in the growth potential of this company and believes that with the development of LED technology and the popularity of the market, its growth will attract attention.

There are only a handful of suppliers of mature substrate materials in the world. There are no more than two technical routes for large-scale commercial applications: Japan's Nichia Chemical's sapphire substrate and the United States Cree's silicon carbide liner. bottom. The two companies once monopolized the market for almost all substrate materials and created a complex patent system, setting up technical barriers for foreigners eager to enter. In addition, only a few companies from Russia, Ukraine and other countries are involved in the manufacture of sapphire substrate materials. In China, although a few companies have invested funds to enter the field of sapphire substrates, they are still at an early stage.