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Philips to double power LED production capacity

The lighting company makes a major investment in Singapore that will allow it to double production capacity for its power LED chips.

Philips, the lighting industry giant that owns the LED chip manufacturer Lumileds, is to set up a wafer facility in Singapore where it will manufacture power LEDs for emerging lighting applications.

The new fab, which is set to begin initial production in the first quarter of 2007, is expected to be fully-ramped by the end of next year, at which point it will have doubled the company's total power LED production capacity.

Philips has already acquired an empty building in Singapore, which it is now beginning to fill with the new chip manufacturing equipment that will be required to make its flagship Luxeon emitters. The chips made in Singapore will be packaged at another Philips facility in Malaysia.

Philips says that the huge investment is necessary to keep pace with the demand for its high-power LEDs. It expects the devices to find use in camera phone flash components, large LCD backlights, and automotive lighting.

Lumileds currently manufactures the Luxeon power LEDs at its headquarters in San Jose, CA, but it appears that this fab on its own would not have been able to meet the expected future demand. A Philips spokesman said that LED production in San Jose would carry on as normal for the foreseeable future.

Although unable to give details about its precise floor area, or the financial investment being made in it, the Singapore fab is going to be a very large operation. At full capacity, it is expected to employ some 900 people.

Philips Lighting CEO Theo van Deursen said, "This investment will not only double the production capacity of our power LEDs in the next year and strengthen our number-one position in this field, it will also significantly increase efficiency."

Just over a year ago, Philips became the sole owner of Lumileds when it bought out the half-share in the joint venture company previously owned by Agilent Technologies (see related story).

Lumileds currently generates around $400 million in annual sales, and Philips says that the division is well on track to meet all growth and profitability targets.

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