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Market demand provokes AlGaInP ramp at SDK

Monthly production will more than triple to 100 million units following a sharp increase in demand from outside of Japan.

Showa Denko (SDK), the diversified Japanese chemicals company that also manufactures high-brightness LEDs, is stepping up its AlGaInP chip capacity with a ¥1.5 billion ($13 million) investment.

SDK's upgrade will include an expansion of MOCVD capability to make more epiwafers, with the company planning to increase chip production from 30 million units per month to 100 million.

Expansion work will begin in February 2007, and is expected to be completed in the third quarter of next year.

"We are seeing a sharp increase in the amount of orders we receive from overseas customers," said the Tokyo-headquartered firm.

SDK is expecting demand for ultra-bright AlGaInP LEDs to grow at an annual rate of around 40 per cent over the next five years, driven primarily by large-area display backlighting and automotive applications of the technology.

The company now expects to post over ¥2 billion in revenue from sales of red, yellow and orange emitters in 2007, and double that in 2008 after the fab expansion is completed.

AlGaInP epitaxy and device production forms a key part of SDK's "Passion" project, with which it hopes to enter a whole range of fast-growing industries (see related story).

The company also sells semiconductor processing materials, makes epiwafers for SiC-based power devices, and is developing GaN-based LEDs.

It claims to be the only company that is able to provide ultra-bright full-color RGB LEDs, including novel "pure green" GaN devices emitting at 555 nm, and believes that these devices will have an impact on the general lighting market from 2010 onwards.

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