LED Industry News: Taiwan and China

Mitsui & Co., Ltd., a major Japan-based industrial conglomerate, is to become the largest shareholder in Taiwan-based LED wafer and chip maker Formosa Epitaxy Inc (Forepi). Mitsui will invest around NT$2.7 billion (approximately JPY7.6 billion) to acquire 15% of Forepi as part of an upcoming private placement of 90 million shares at a price of NT$36.44 per share.

LED road light installing Forepi's LED chip Founded in 1999, Forepi is the second-largest LED epitaxy and chip manufacturer in Taiwan and has plants in Taoyuan, Taiwan and Yangshou, Jingu province, China. Mitsui says the deal is part of its aim to “create new value by consolidating the resources along the LED supply chain.” As well as having a network of shops selling LCD TVs and monitors, Mitsui has held a 16% stake in AOC International, one of the world’s leading monitor makers.

A Taiwan Economic News article says that, in addition to the Mitsui deal, Unity Opto Corp. will purchase 15.3 million shares in Forepi for an investment of US$18.6 million. Unity is a leading LED packager in Taiwan, and the deal will help to secure a steady source of LED chips for its backlight packages used in various applications, including TVs, computer monitors and tablet PCs. Also, the company has begun introducing LED packages for general lighting.

China LED makers to add MOCVD systems in 2011

China's LED industry is expected to install 700-800 MOCVD systems in 2011 compared with 330 units installed in 2010, according to a report on www.digitimes.com. This trend is likely to enable China's LED industry to catch up with Taiwan in terms of MOCVD production capacity.

The report also suggested that one China-based LED maker has given an order for somewhere between 400 and 500 MOCVD machines to Germany-based Aixtron. If this is true (Aixtron didn’t comment but its share price rose rapidly after the report came out) then delivery lead times will be greatly extended.

The report says that Sanan Optoelectronics is currently the largest LED-chip maker in China. The company apparently had a total of 40 MOCVD machines at the end of 2010 and will expand this to 100 units in 2011. The current second- and third-largest chip makers, Xiamen Changelight and Inspur Huaguang Optoelectronics, are expected to each have around 30 machines by the end of 2011.

Epistar invests further in China JV

Epistar Corp., Taiwan’s largest LED chipmaker, is to invest an additional US$19.5 million in United LED Shan Dong Corp, a joint venture established in mainland China with United Microelectronics Corp. This will push Epistar’s investment in the Chinese joint venture to a total of US$27.5 million, with its stakeholding increasing to 55 percent from 50 percent, according to an article in the Taipei Times.

The same article quoted an analyst company, which is forecasting that Epistar’s sales will grow by 25 percent to 30 percent year-on-year in 2011, after experiencing weakening demand and falling prices in the final quarter of 2010.

Tyntek expands in China and Taiwan

Taiwan-based LED maker Tyntek plans to invest CNY153 million (US$23 million) to set up an LED production joint venture with the Fuzhou government in China, according to an article on the Digitimes website. The first phase of development will focus on LED epitaxy and chip production, and around 30 MOCVD systems could be installed eventually. Production is scheduled to commence at the end of the third quarter at the earliest.

The article also says that Tyntek will install a further 10-15 MOCVD machines at its Taichung, Taiwan facility in the second and third quarters of 2011.