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31 December 2008


Taiwan firms cut back LED production

Due to the pessimistic business outlook for 2009, Taiwan-based LED chip and system product maker Opto Tech Corp has decided to reschedule indefinitely its start-up of a factory Ningbo Opto Tech Semiconductor Co Ltd in Ningbo Wangchun Industrial Park, Zhejiang province, China, according to

Construction of the plant was announced in October 2007, for start up in fourth-quarter 2008. It was originally set to deliver a monthly production capacity of 3bn LED chips, focusing exclusively on high-brightness LEDs (due to instability in orders from the traditional LED market, which then accounted for nearly 90% of Opto Tech’s revenue). The firm now says that it will restart the project when the business environment is more favorable.

At its factory in Taiwan, Opto Tech has already ordered four metal-organic chemical vapor deposition (MOCVD) systems, two of which are currently being installed (with production due to begin in March 2009). Installation of the other two is being postponed until some time in 2009.

Opto Tech currently has a monthly production capacity of 3bn LED chips (including high-brightness LEDs) and 600m optical sensor chips. The use of LED-illuminated backlight units (BLUs) in notebook PCs is expected to continue to accelerate in 2009, offering a source of revenue growth, Opto Tech notes.

Epiwafer foundry Visual Photonics Epitaxy Co Ltd (VPEC) of Ping-Jen City, Taoyuan, Taiwan says that, to reduce losses, it is going to close down its LED production lines on 15 January and will concentrate its sources on solar cell and microwave components business.

In a filing to the Taiwan Stock Exchange (TSE) the firm indicated that its LED product lines are not strong enough to compete with first-tier LED companies under the current global economic difficulties.

VPEC’s LED business has fallen from 40.1% of total revenues in 2006 to 30.1% in 2007, and only 18.3% for January-November 2008. Overall November revenue was NT$41.8m (US$1.26m), down 60% from October’s NT$105m and 55% on a year ago.

See related items:

HB-LED lighting market to grow to $1.65bn in 2012

Market for packaged LEDs in solid-state lighting to more than triple by 2012

LED market growth to accelerate to 12% in 2008

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