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2014 Business Condition Analysis for SILAN, the leader of LED



Hangzhou SilanMicroelectronics Co., Ltd (hereinafter refereed to as “SILAN”) released 2014annual report on March 9. All main businesses continued to maintain the stableand better tendency and business performance was further improved. The totalbusiness revenue was 1.87003 billion Yuan with an increase of 14.17% than 2013.The business profit was 116.47 million Yuan with an increase of 82.89% than2013. Total profit of the company was 185.02 million Yuan with an increase of48.83% than 2013. The net profit of the company belonging to the parent companyis 164.34 million Yuan, with an increase of 42.58% than 2013.

SILAN indicatedthat the business revenue of integrated circuit, power device products, LEDchip and LED products showed an increase compared with the same period of lastyear as output progress of new product is quickened. The business revenue ofLED illumination driven circuit, LED chip and LED products registered a quickincrease. The increase in business revenue of integrated circuit in 2014 wasmainly from quick growth in delivery of LED illumination driven circuit.Moreover, financial cost was reduced effectively while financing channels werefurther broadened at the same time through enhancing capital management in2014.

The businessrevenue of LED chip and products of SILAN showed a year-on-year increase of4.73% and 113.46% in 2014. The gross profit rate of LED chip and productsshowed an increase of 20.76 percentage points and 10.02 percentage pointscompared with the same period of last year. SilanAzure and multi-color,subsidiaries of the company, made up the deficits and got profit. SilanAzuresucceeded in developing LED high voltage chip for illumination in 2014 andlaunched to the market. With release of production capacity, Multi-colorCompany consolidated its competitive advantage in high-end color screen pixeldevice market and further improved the brand image. The newly built LEDproduction workshop of SilanAzure was constructed with the roof up toe the endof 2014. Purification and decoration will be completed in the first half of2015 to further expand the capacity of LED chip.

It is understoodthat development of SILAN is not stable in recent years. The total businessrevenue was 1.63793 billion Yuan in 2013, showing an increase of 17.64% overthe total business revenue of 1.3490242 billion Yuan of 2012. The net profitwas 1.1527 billion Yuan in 2013 with an increase of 530.81% compared with thatof 2012. The total income of 2012 showed an increase of -12.74% compared withthat of 1.5459887 billion Yuan of 2011. The net profit of 2012 was 18.273million Yuan, with an increase of -88.07% than that of 2011.

The above figureshowed that SILAN was in the red from 2011 to 2012. Affected by externaleconomic downturn and intensifying competition of LED Industry, the income andprofit of 2012 hit rock bottom and the net profit decreased by 88%. Demand onLED was on the increase from the second half of 2013 to the first half of 2014,its business revenue showed a stable growth. The performance of SILAN may beaffected by subsidy halt. But its powerful LED market development space willcompensate it.

SILAN indicatesthat the company will invest 1 billion Yuan to build a production line for8″integrated circuit chip in two to three years to come in order to grasp anopportunity to quicken upgrade of chip production lines of the company andimprove comprehensive competitive ability of the company’s products. Smoothimplementation of the project will improve manufacturing technique level of thecompany effectively and further shorten the gap between similar internationalsemi-conductor enterprises, enhance profitability of the company effectivelyand increase comprehensive competitiveness of the company.

In the aspect oftechnology, SILAN, with IDM (Integrated Design and Manufacture) as the mainmode in domestic semi-conductor field, divides its expenditure mainly intodesign R&D and manufacturing technique R&D. The company aims to becomea leading semi-product supplier with proprietary brands at home. Concentrationon the long-term goal, the R&D project will still focus on several majoraspects such as power management product platform, power semi-conductor deviceand module technology, digital audio technology, radio frequency/analogtechnology, MCU/DSP product platform, MEMS sensor products and processtechnology platform, LED manufacture and packaging technique platform. Thecompany will enrich present product group constantly through these R&D activitiessuch as launching of power device and power module such IGRT, LED powercircuit, digital audio/video circuit, MCU circuit and MEMS sensor products andlaunching of high quality LED chip and products. The company and its subsidiarycompanies were granted 128 patent authorizations, 11 design authorizations forlayout design of integrated circuit in 2014 and obtained 511 all types of rightcertificates accumulatively up to the end of 2014.

LED market willexperience large increase in 2015 with demand pull of downstream lightingapplication market. SILAN predicts that the total business revenue will reach2.25 billion Yuan in 2015 (an increase of 20% than 2014) and the total cost ofbusiness will be controlled at 2.05 billion Yuan. Capacity will also beexpanded in 2015 to increase investment for LED products, technical R&D, enhancemarket promotion and enterprise brand building, explore LED chip market,improve LED market share and increase enterprise profit. 



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