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China To Introduce Over 1200 MOCVD Tools In 2010

The planned MOCVD number reflects the extraordinary prosperity of China’s LED chip industry but is probably an over estimation says LEDinside.

 According to LEDinside’s latest Report on China’s LED Chip Industry in 2010, China has planned to introduce over 1200 MOCVDs and more than 300 units will be added in 2010.

In light of historical experiences, the annual MOCVD increase in practice will be less than the planned number. The planned MOCVD number reflects the extraordinary prosperity of China’s LED chip industry.

At least 6 enterprises have planned over 100 MOCVDs, for example, Xiamen Sanan and Elec-Tech Elect International have already ordered over 100 units. The main reasons for MOCVD increase are subsidy policies of local Chinese governments and the huge LED market prospect seen by enterprises, which have greatly encouraged LED manufacturers to massively introduce MOCVD equipment.

Firstly, in view of the fiscal subsidy for introducing MOCVD equipment, LED companies can basically receive a subsidy of RMB 8~10 million Yuan per unit from their own local governments, which will substantially reduce their equipment purchase cost and enable a significant rise of planned MOCVD numbers.

The government fiscal subsidy policy is the major cause for LED manufacturers to plan large-scale MOCVD introduction. Moreover, Policies issued by local government to attract investment, particularly MOCVD subsidies have effectively promoted China market entrance of more mainstream LED chip enterprises from Taiwan, U.S and other regions.

Secondly, in addition to the enormous market potential of future general lighting, new application fields have been continuously developed. Meanwhile, the existing applications markets keep growing mature.

In China, there will always appear to be a market rush as soon as a new industry emerges, such as PV businesses, not to mention the LED industry. The number of LED chip plants has soared since over a year ago, thus increasing the proposed number of MOCVD reactors.

Meanwhile, most companies have little understanding of the status quo of China’s LED chip manufacturers, for instance, the number of LED chip enterprises and the planned number of MOCVD tools in each one, the forecast of MOCVD market volume, etc.

A lack of accurate investigation into China’s LED chip industry has resulted into blind industry entrances and over optimism about the planned MOCVD number of many manufacturers.

Finally, a lack of related technology talents turns out to be inevitable. Because of the unexpected increase of China’s LED chip enterprise, most of which have MOCVD introduction plans, the shortage of R&D personnel related to epitaxial wafer production will become a great challenge. Personnel will play an important role in the future market competition between China’s LED chip enterprises.
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