Epistar chairman: consolidation among Taiwan- and China-based LED chip makers by 2015

Epistar chairman Lee Biing-jye says there will be consolidation among Taiwan- and China-based LED chip makers by 2015. Reshuffling in the LED chip manufacturing industries in Taiwan and China through merger may happen faster than originally expected and larger makers will merge with smaller...

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Epistar chairman Lee Biing-jye says, “there will be consolidation among Taiwan- and China-based LED chip makers by 2015.”

Reshuffling in the LED chip manufacturing industries in Taiwan and China through merger may happen faster than originally expected and larger makers will merge with smaller ones, leaving only two Taiwan-based makers and three China-based makers by 2015, according to chairman Lee Biing-jye of Epistar.

As continued improvement in technology keeps decreasing production costs, prices for LED chips are estimated to drop by 10% each year in the near future, Lee said. In addition, progressive development of LED chip technology is likely to reduce room for LED packaging and thereby lead to LED chipmakers merging with packaging houses, Lee pointed out.

Epistar has set aside funds for vertically combining LED packaging houses and/or downstream LED product makers through a stake investment over the next three years, Lee indicated.

Epistar suffered a net loss of NT$1.117 billion (US$38.5 million) in 2012 due to non-operating net losses of about NT$2.0 billion from stake investment in fellow maker Huga Optotech, Lee noted. However, Epistar expects 2013 business operation to turn profitable.

Epistar expects capital expenditure of NT$3.0 billion in 2013 and will set aside a larger budget for 2014, Lee said. Epistar plans to add 30 MOCVD sets in 2014, Lee indicated.

Epistar chairman: consolidation among Taiwan- and China-based LED chip makers by 2015

Sapphire prices expected to rise 10-15% in Q1 2014

Sapphire maker Monocrystal says due to potential extended use in smartphones, prices for sapphire are expected to increase 10-15% in the first or second quarter of 2014. Sapphire growth systems are used by LED companies for the production of LED cores and LED wafers.

LED-Sapphire-Products

Due to potential extended use in smartphones, prices for sapphire are expected to increase 10-15% in the first or second quarter of 2014, Taiwan-based makers cited Russia-based sapphire maker Monocrystal as indicating. Sapphire growth systems are used by LED companies for the production of LED cores and LED wafers.

Following use to make covers for smartphone rear cameras and the iPhone 5s Home key, sapphire is likely to be further used to make screen cover glass, the sources said. However, cost will be key to further applications, the sources noted. For a 4-inch smartphone screen, cover glass made from Corning-developed Gorilla glass costs about US$3, and one made from sapphire will cost about US$30, the sources indicated. To be feasible, sapphire smartphone screens should drop to US$10-15, the sources said.

Monocrystal currently has a monthly production capacity of 1.5-2.0 million millimeters of sapphire ingots, the sources said. South Korea-based Sapphire Technology Company will expand production capacity and may become a main supplier for smartphone vendors Samsung Electronics and LG Electronics, the sources indicated.

Sapphire prices expected to rise 10-15% in Q1 2014

Sanan Optoelectronics plans to add 100 MOCVD sets in 2014

The largest China-based LED epitaxial wafer and chip maker Sanan Optoelectronics plans to expand production capacity by adding as many as 100 MOCVD sets in 2014, company president Lin Ke-chuang said at LEDforum Taipei 2013 on October 16.
We formerly reported that MOCVD precursor demand for LEDs...

Sanan-Optoelectronics

The largest China-based LED epitaxial wafer and chip maker Sanan Optoelectronics plans to expand production capacity by adding as many as 100 MOCVD sets in 2014, company president Lin Ke-chuang said at LEDforum Taipei 2013 on October 16.

We formerly reported that MOCVD precursor demand for LEDs is great and still growing, which led to a China factories deployment of MOCVD equipments, and Sanan Optoelectronics is just one case.

Sanan’s capacity utilization increased from 85-90% in the second quarter of 2013 to 100% in the third, Lin indicated. Sanan currently has 140 MOCVD sets and is installing 20 additional ones, equivalent to monthly capacity of 500,000 2-inch LED wafers, at the end of 2013, Lin said. In order to expand capacity, Sanan plans to raise CNY3-4 billion (US$490-654 million) through private placement, Lin noted.

Sanan has won open bids to supply 40% of LED street lamps procured by local governments in China, Lin said.

With 70% of its LED chips expected to be used in lighting and 25% in backlighting, Sanan aims at revenues of CNY4.5 billion for 2013, Lin indicated. Sanan expects revenues for the fourth quarter of 2013 to grow 5-5% sequentially, Lin said.

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Sanan Optoelectronics plans to add 100 MOCVD sets in 2014