LED Cycle Turns Positive as Demand Grows
February 20, 2017
 
According to Digitimes, the supply of low to medium power LED chips has fallen short of demand by 30% to 50% LED lighting continues to increase.  This has prompted Chinese producers to order 120 MOCVD tools, with 60 to 80 coming on line in 1H 2017 and the balance in the back of the year.  As a function of excess demand, chip pricing has improved as utilization rates rise, with the outcome a push toward additional capacity. Several China-based LED chipmakers are expanding or will expand production capacities, according to LED industry sources. Reportedly, supply of LED chips used in LED light bulbs and tubes has been 30-50% short of demand. For capacity expansion, China-based LED chip makers may have ordered at least 120 new MOCVD sets in total, with 60-80 of them expected to come into operation in the first half of 2017 and the remaining in the second half, the sources noted. China-based LED chipmakers are expanding after several years of minimum investments:

• HC SemiTek has invested CNY6 billion (US$876 million) to set up a factory with annual production capacity of three million LED epitaxial wafers in eastern China and will start production at the factory in May 2017, the sources said.
• San'an Optoelectronics, the largest China-based LED chip maker, will expand production capacity for blue-light and AlGaInP LED chips in 2017.
• Huaian Aucksun Optoelectronics Technology has been expanding production capacity since the second half of 2016, with monthly capacity to be expanded to 800,000 LED epitaxial wafers, the sources indicated.
• Xiamen Changelight will add MOCVD sets for producing AlGaInP LED chips, the sources noted.

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