22 December 2010

Tablet PCs may drive shortage of high-end LED chips in February

Due to the rise of tablet PCs, the supply of high-end LED chips is likely to fall short of demand, starting February 2011 at the earliest, forecasts Frank Chien, chairman of Taiwanese LED maker Formosa Epitaxy Inc (Forepi), according to a report in Taiwan Economic News.

Tablet PCs have quickly emerged as one of the most stellar products in the global market. Like LCD TVs and monitors, they mainly use LEDs as the light source for backlights, and Chien confirms that Forepi started delivering LEDs for tablet PCs in October.

In addition to Apple’s hot-selling iPad, which uses LEDs made by Japan’s Nichia Corp and Toyoda Gosei, many tablets developed by other global PC vendors are scheduled for launch from early 2011, most of which use Taiwan-made LEDs in their backlights, says Chien. It hence makes sense that shortages of LED chips, especially higher-end models, are very likely to loom then and linger throughout the year, he adds.

Aware of the possible LED shortage, some display panel makers have moved to secure their sources of supply. For example, Korea’s LG Display has joined with Forepi and Taiwanese TV maker Amtran Technology Co Ltd to form the LED-making joint venture Jiangsu Canyang Corp in China. The collaboration will not only help LG Display to secure a stable supply of LEDs, but should also provide additional momentum to Forepi’s business growth, Chien says.

In the meantime, Amtran is concerned about LED shortages in 2011, and has stated that, with selling prices falling, LED-backlit LCD TVs will replace traditional CCFL (cold-cathode fluorescent lamp) TVs more quickly in the coming years and, consequently, use a large part of the limited supply of LEDs in the future. This implies that demand for LEDs will skyrocket, along with more LED-backlit devices being put on product shelves worldwide.

To capitalize on the market boom, Forepi plans to add 15–20 metal-organic chemical vapor deposition (MOCVD) reactors for its Taiwan factory, and 25 for the LG Display–Amtran– Forepi joint venture. Currently, 60% of Forepi’s LED output goes to usage in TVs, 15% each to tablets and LED lighting, and 10% to projectors and other devices. The firm aims to increase its capital equipment budget to NT$4–5bn (about US$150m) in 2011, targeting annual revenue of NT$7bn, or US$234m (up more than 50% on 2010’s NT$4.5bn, or US$150m).

See related items:

LED chip demand for TV backlight to return to first-half 2010 level in Feb

LED market grows from $6.1bn in 2009 to $10bn in 2010

FOREPI purchases its first Aixtron G5 system

Tags: Forepi MOCVD LEDs

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