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China LED Chip Makers Reduce Prices

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One of China's largest LED epi wafer and chip maker, Sanan Optoelectronics, has lowered its quotations for LED chips by 20% for its 2835 models used in lighting products, while the second largest firm, HC SemiTek, has also cut prices, reports Digitimes.

Industry sources stated they believed that the price reductions are intended to force smaller competitors out of the market, adding that the largest Taiwan-based competitor (Epistar) has not followed suit and instead has declined orders coming with low quotes.

However, the latest price cuts have yet to push up demand for LED chips, as clients are probably still waiting for further reductions, the sources say, adding that LED prices are likely to drop further in first-quarter 2018.

Despite the price cuts, Sanan will capitalize on the China government's subsidization for equipment used to produce compound semiconductors in a bid to set up a production base in Quanzhou, southeastern China, with investment totaling CNY33.3bn (US$5.03bn). The production base will produce gallium nitride (GaN) substrates, epiwafers and chips, gallium arsenide (GaAs) epiwafers and chips as well as high-power GaN laser diodes, with all production to begin in five years.

For LED epiwafers and chips, Sanan is said to have nearly 400 metal-organic chemical vapor deposition (MOCVD) systems currently and will expand its capacity to 450 in early 2018. HC SemiTek and Huaian Aucksun Optoelectronics Technology are also adding MOCVD systems, and Xiamen Changelight and Shenzhen MTC Optronics will also do so, the sources say.


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