LED chip price currently stable but may fall in H2 2013
In the long term, only invalid production capacity in China can help the LED industry to return to supply and demand balance
In accordance with statistics in Gold membership reports of LEDinside, Green Energy Division of the Global market research firm TrendForce, thanks to strong demand in the global LED lighting market in the first half of this year, the utilisation rate of MOCVD machines that the major chip manufacturers have installed and debugged shows rising trend.
The chip price has been stable this year, but with the increasing capacity of chip manufacturers, it remains to be seen whether the LED chip price will be falling in the second half of this year. But in the long term, only invalid production capacity in China can help LED industry to return to supply and demand balance.
Chinese Major LED Chip Manufacturers MOCVD Utilisation Rate
The rise of LED lighting market has directly stimulated the upstream chip market to achieve rapid demand growth this year, the Chinese chip makers who have originally specialised in the production of display applications actively adjust product strategy and improve the ratio of lighting chips in the product segment.
HC SemiTek and Silan Azure used to have chip for LED display as core business, now they adjust production capacity in response to increasing market demand for LED lighting chips, all newly added MOCVD equipments are put into use for the production of lighting chips. Overall, the growth in display market has slowed down since 2012, more competitive, more difficult to make profit for manufacturers, which also is one the reasons why the chip manufacturers switched to produce LED chips for the lighting application.
Sanan Optoelectronics totally owns 149 units of MOCVD, currently, more than 90 percent of its MOCVD machines have completed the testing stage and have been put into operation, and utilisation rate also exceeds 80 percent.
ETI has 92 units of MOCVD as of 1H13, 45 units have been put into use for mass production, both its installation volume and mass production amount are the second in China. Due to less MOCVD machines, HC SemiTek's MOCVD machines and Silan Azure's MOCVD machines have already fully come into use. Other chip vendors also have achieved some growth in utilisation rate of equipments.
The growth in utilisation rate of MOCVD increases manufacturers' confidence to expand production; the manufacturers who delayed expansion plan because of poor market also restart the program.
According to the statistics in LEDinside Gold membership report, The number of MOCVDs in China reached 1,013 in late 2012, and it is estimated China will be adding more than 100 new MOCVD equipments (calculated according to the number of chambers) in 2013.
LEDinside says that in view of the current total number of MOCVD equipment in mainland China, overcapacity still exists. But looking carefully, many manufacturers have not put their newly added equipments into operation since the equipments were introduced. Also, most machines are old, performance and efficiency are far less than the new machines, these invalid capacities may exit the market after 2013, which is helpful for the market to return to supply and demand balance.
MOCVD Installation Volume（Chambers）