China plans to increase over 1,200 MOCVDs

TAIWAN: According to LEDinside, the research division of TrendForce Corp. has lately published a Report on China’s LED Chip Industry in 2010, pointing out that over 1200 MOCVDs have been planned for LED industry in China in the upcoming few years, of which, more than 300 units will be added in 2010.

LEDinside believes, in light of historical experiences, the annual MOCVD increase in practice is less than the planned number. However, the planned MOCVD number still reflects the rapid development of China’s LED chip industry.

At least six manufacturers have set the MOCVD purchase plan to over 100 units, for example, both Xiamen Sanan and Elec-Tech International have ordered more than 100 MOCVDs. The main reasons for MOCVD increase are subsidy policies of local governments and the promising LED market outlook, which have greatly encouraged manufacturers to massively introduce MOCVD equipment.

In view of the fiscal subsidy for MOCVD introduction, LED chip enterprises can receive a MOCVD introduction subsidy of RMB 8~10 million Yuan per unit from local government, which will substantially reduce their equipment purchase cost and enable a significant rise of planned MOCVD number.

The government fiscal subsidy policy is the major cause for LED manufacturers to plan large-scale MOCVD introduction. Moreover, local government MOCVD subsidy allows more mainstream LED chip enterprises from Taiwan, U.S and other regions into China market.

In addition to the enormous market potential of the general lighting in future, new LED application areas are continuously growing while the markets of existing LED applications are becoming more and more mature. LEDinside says, in China, there is always a market entrance rush as soon as a new industry emerges.

The number of LED chip plants has soared in the past more than a year thus the planned MOCVD number has followed to increase.

Meanwhile, most companies have little understanding of the status quo of China’s LED chip manufacturers, for instances, the number of LED chip enterprises, the planned MOCVD number of each one, the total planned MOCVD number, the forecast of MOCVD market volume, etc. A lack of accurate investigation into China’s LED chip industry has resulted into blind industry entries and the overoptimism about the planned MOCVD number of many manufacturers.

Finally, the shortage of related technology talents turns out to be inevitable. Because of the unexpected increase of China’s LED chip enterprise, most of which have MOCVD introduction plans, R&D personnel shortage will become a great challenge. Personnel will play an important role in the future market success of China’s LED chip enterprises.

LEDinside has made an in-depth research on the status quo of China’s LED chip industry and a detailed analysis on the planned MOCVD number of each company. Based on LEDinside’s Report on China‘s LED Chip Industry in 2010, large MOCVD amount does not necessarily mean real high productivity.

The productivity transfer comes only when the market accepts the product and the technology keep in pace with the market development.