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Veeco to overshadow Aixtron in GaN MOCVD LED equipment market

Due to overcapacity, projected shipments of reactors used in the growth of gallium nitride based LEDs have been downgraded for 2012. Veeco will also have a clear lead over Aixtron for GaN LED tools for the full year 2012

IMS Research has cut its forecast for 2012 GaN MOCVD shipments to 281, according to the second quarter 2012 MOCVD update of its "GaN LED Quarterly Supply and Demand" report.

IMS Research Analyst Jamie Fox comments, “The decline in 2012 is due to sufficient tools being in place for backlighting, lighting not yet fully taking off and expiring subsidies in China. The revision to our forecast is due to an analysis of the latest supplier earnings calls and our latest surveys of manufacturers which showed that some companies’ purchase plans have been cut back more than expected in recent months, particularly in China. We have heard about capacity utilisation moving up in Taiwan this quarter, but we don’t see this as a worldwide trend at the moment.”


The graph above shows that 2012 shipments will be much lower than 2010 and 2011, but will still be higher than in 2009.

2012 will be a quiet year as, in terms of equipment installation, it will be the low point between the backlighting and lighting cycles. After a huge rush to buy in China in 2011 (it peaked at 92 percent of shipments in the fourth quarter), sales here are dropping significantly in 2012.

The entire worldwide market in the first quarter of 2012 was about the same size as the one largest order in China in the fourth quarter of 2011. However IMS Research believes the market has bottomed out in the first half of 2012 and that modest growth should return in the second half of 2012.

While the industry is currently in an overcapacity situation which will continue in the short term, longer term projections show that many more reactors will be needed over the coming years to meet the demand in lighting.. At present, big changes to the long term outlook are not anticipated.

Last quarter IMS reported on a strong quarter for Aixtron, which regained the lead in the fourth quarter of 2011. However, as anticipated, this has not lasted, and Veeco was well ahead again in the first quarter with an estimated 59 percent market. Veeco will also have a clear lead over Aixtron for GaN LED tools for the full year 2012, according to surveys with end customers.

What's more, with Veeco having very recently released three new MOCVD systems for LED growth , this may further improve the firm's market share.

According to IHS, China came top in terms of shipments in the first quarter, followed by Taiwan. With typical tool prices remaining at about $2 million, Veeco's K465i, used for the growth of gallium nitride based LEDs, was the most popular tool in the first quarter. Also, according to IHS, Epistar is the leader in cumulative tools installed, while Elec-Tech is ranked top in projected 2012 customers.
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