News

21 December 2009

 

Taiwanese LED makers set up plants in China

Epistar to build LED fab in Jiangsu Province

Due to the increasingly strong demand for LEDs used as backlights in notebook PCs and liquid crystal display (LCD) TVs, Epistar Corp of Hsinchu Science-based Industrial Park has decided to invest US$600m to build an LED fabrication plant in the Wujin Hi-tech Industrial Zone in Changzhou, Jiangsu Province, central China, according to the Taiwan Economic News.

Epistar is already Taiwan’s largest LED epiwafer and chip maker, and the world’s largest supplier of red LEDs and the fourth-largest of blue LEDs (in terms of production volume). The firm already has a plant operational in both the Fujian and Liaoning Provinces of mainland China.

The firm indicated that, in the first stage of construction (starting in first-quarter of 2010), 30 metal-organic chemical vapor deposition (MOCVD) reactors will be procured for the new plant. These should come online in first-quarter 2011 and add 40% to the firm's existing output.

The firm is also planning to strengthen its cooperation with firms downstream in Taiwan’s LED supply chain, such as LED backlight module maker Lite-On Technology Corp and LED packaging firm Everlight Electronics Co Ltd, to build an integral supply chain for LED applications in China.

Epistar’s capacity expansion is also proceeding in Taiwan, where 30 new MOCVD reactors are due to start mass production next year, the firm says.

Arima Opto to set up LED chip joint-venture in China

On 8 December, Taiwan-based LED epitaxial wafer and chip maker Arima Optoelectronics Corporation (AOC) announced the formation of a high-brightness LED chip manufacturing joint venture with the local government in Shanxi Province, northern China, according to Digitimes.

AOC will invest US$17.6m for a 40% stake in the plant but will receive US$39.6m for providing technical know-how and services in the establishment of production lines and subsequent production.

The joint venture will offer LEDs for backlights, mainly targeting China’s top-five TV makers (including Hisense, Haier and TCL).

A total of 12 MOCVD reactors should be installed by the end of second-quarter 2010, with production starting in third-quarter 2010 at an annual capacity of 1 billion high-brightness LED chips. AOC adds that, over the following three years, the joint venture plans to increase its number of MOCVD production reactors by a further 48, to 60.

InGaN-based blue LEDs currently account for about 10% of AOC's total revenues, and AlGaInP-based red LED production uses about 70-80% of its total capacity, the firm notes.

AOC plans to restart its suspended general lighting business, and to look for strategic partnerships through private placements, says Digitimes. Eyeing the LED general lighting market in China, it also plans to establish an LED plant at Arima Group’s production base in Wujiang, China.

Neo-Neon to site LED epiwafer plant in Yangzhou

In mid-November, Neo-Neon Holdings Ltd, which was founded in Taiwan in 1978 and is reportedly the world’s No.1 supplier of decorative lighting, plans to float Taiwan depository receipts (TDRs) to raise about US$50m to finance construction of its first LED epiwafer plant in mainland China, according to the Taiwan Economic News. Citing excess demand for its LED backlighting used in LCD displays, the firm plans to build an epi-wafer plant in Yangzhou to make LED chips for both its own LED-lighting affiliates as well as other LED makers.

The issuance will make it the first overseas Taiwanese LED-lighting maker to float TDRs. Neo-Neon’s production is based in He-Shan, Guangdong Province, while the firm made an initial public offering on the Hong Kong exchange in 2006.

According to chairman B.C. Fan, Neo-Neon wants to build the plant to ensure sufficient supply of LED chips for its lighting products, as the global supply of chips is expected to be outpaced in 2010 by demand from manufacturers of liquid-crystal display (LCD) TV backlights.

According to the Hong Kong Economic Journal and the Hong Kong Economic Times, Neo-Neon has signed an agreement with the Yangzhou industrial zone regarding the citing of the plant is designed to operate 30 MOCVD reactors.

Specifically, according to Neo-Neon’s announcement at Hong Kong Exchanges and Clearing Ltd (HKECL), the firm will carry out the investment plan in three phases, with each phase installing MOCVD reactors for an output of 20,000 two-inch epiwafers per month. First-phase production lines will become operational in June 2010 and second-phase lines in second-half 2010. Installing of third-phase lines will begin in 2011.

The LED chip plant will add a final touch to Neo-Neon’s plan to establish integrated manufacturing capability for LED lighting, which is now being supported by its in-house LED packaging and lighting fixture lines.

Neo-Neon’s LED manufacturing scheme has convinced a venture capital fund owned by Tsinghua University to take a 12% stake in the firm (becoming its main shareholder).

Fan says that the firm has secured contracts to supply a total of 100,000 LED street lights throughout mainland China. It has already opened 21 offices there as distribution footholds.

He also reckons that the mainland’s LED lighting market will see explosive growth once its LED lighting standard is enacted, together with a significant boost in 2010 from Expo 2010 Shanghai China, cityscape beautification projects, and an aggressive government-backed LED street-light project.

See related item:

China’s Neo-Neon qualifies five Aixtron CRIUS systems for production of UHB blue/green LEDs

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