LED MOCVD sales to bottom out in first half of 2012
The first three quarters of 2012 combined are anticipated to be about the same as just one of the peak quarters of 2009 and 2010 when there were over 230 GaN MOCVD reactors shipped
According to IMS Research's "GaN LED Quarterly Supply and Demand report", 342 GaN LED MOCVD reactors will ship in 2012.
This compares to 654 tools shipped in 2011, a decline of 48%.
The first two quarters of 2012 are currently expected to experience the lowest shipment levels. This will hopefully be accompanied with a modest recovery in the second half of the year as companies begin adding capacity in response to expectations of rapid demand growth from the general lighting market in 2013 onwards.
The MOCVD market saw a large boom in 2009 and 2010 due to capacity needs for LED TVs and peaked in the second half of 2010. The following year saw lower but healthy shipment levels. This was partly due to new Chinese manufacturers and Chinese-Taiwanese joint ventures entering the market backed by government subsidies for MOCVD reactors despite an oversupply in the second half of 2010.
With the oversupply expanding in 2011 and China’s MOCVD subsidies expiring in most regions, shipments and orders have since stalled. In addition to China’s supply-side subsidies, the over-supply rose on weaker than expected demands. These included global macroeconomic weakness, slower than expected growth in LED TV penetration and the adoption of fewer LEDs per panel in many backlighting applications.
What's more, as LED lighting is still a relatively small market, MOCVD order intake sharply declined in the second half of 2011, resulting in low expectations for the first half of 2012 MOCVD revenues.
IMS Research analyst Jamie Fox explains, “We believe the market peaked in Q3’10 and Q4’10 with 239 and 238 GaN reactors shipments respectively. Almost every quarter since then has been a decline. For 2012, we expect the first three quarters combined to be about the same as just one of those peak quarters. Apart from China, the market is extremely quiet. Without the Chinese growth, the market would have almost completely collapsed.”
However, even with this severe market decline, 2012 is still forecast to be 52% higher than in 2009 (342 vs 224).
IMS says that in Q4’11, shipments actually increased sequentially, as some big orders in China fell in the quarter, particularly for Aixtron. However both the survey of customers’ purchase intentions, and the publically available information on Aixtron and Veeco’s order intake, clearly tell the story of a big decline expected in Q1’12, which will see shipments of around half of Q4.
The report says that China accounted for 76% of the 2011 market, reaching a peak of 92 % in Q4’11.
Aixtron led in Q4’11 by units as predicted, but Veeco was #1 for the full year 2011.
Yangzhou Zhongke was the #1 customer in Q4 2011, and Sanan was #1 for 2011.
Elec-Tech heads the list for likely top customer of 2012.
Despite a trend to 4 and 6 inch wafers globally at tier 1 manufacturers, 2 inch remains the majority due to China’s reliance on 2” wafers.