China growing MOCVD equipment will add LED industry demand and supply stress for 2014

Due to increasing LED lighting demands, and local government MOCVD equipment subsidies, China’s MOCVD market has great growth potential in 2014. China LED chip manufacturers growing number of new MOCVD equipment will put great pressure on the LED industry demand and supply. Goldman Sachs raised its forecast for China’s new MOCVD equipment in 2014 to grow at a Year-over-Year (YOY) rate of 14% to 125 machines.

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The market is focused on the moment that LED industry can leave oversupply behind. China LED chip manufacturers growing number of new MOCVD equipment in 2014 will no doubt put pressure on the LED industry demand and supply. China’s large LED chip manufacturer San’an Optoelectronics, and vertically integrated Elec-Tech International Co. (ETI) both have expansion plans, while Nationstar Optoelectronics Co. is planning to invest in a second phase LED chip expansion project.

China’s MOCVD market has growth potential in 2014, due to increased lighting demands, and local government MOCVD equipment subsidies, according to estimates by Goldman Sachs. At the same time Chinese manufacturers are increasing capital under the consideration of adding production capacity. Goldman Sachs raised its forecast for China’s new MOCVD equipment in 2014 to grow at a Year-over-Year (YOY) rate of 14% to 125 machines. The industry is also actively observing whether China LED manufacturers increased MOCVD will add demand and supply stress.

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According to statistics, China’s two largest manufacturers San’an Optoelectronics and ETI are projected to increase 50 and 40 MOCVD equipment respectively in 2014. Nationstar has also announced its plan of injecting more than RMB 600 million (US$ 98.2 million) in a second phase LED chip expansion project. The company is expected to raise RMB 500 million for the project. Once the factory is completed, LED epitaxal wafer annual production is expected to reach 4.11 million sheets, which will all be used for LED chip manufacturing.

In addition, Chinese manufacturers including Tsinghua Tongfan Company, HC Semitek Corp., Silan Azure Company, Zhongke Semiconductor Lighting Company also have production capacity expansion plans. Taiwanese silicon wafer manufacturer Epistar also hopes to add new MOCVD equipment in China, followed by vertically integrated Taiwanese manufacturer Lextar expanded MOCVD production capacity in China.

China growing MOCVD equipment will add LED industry demand and supply stress for 2014