20 December 2010
LED chip demand for TV backlight to return to first-half 2010 level in Feb
Taiwan-based LED chipmaker Formosa Epitaxy (Forepi) expects LED chip demand to return to the levels of first-half 2010 in February and March 2011 (including volume shipments for applications in tablet PCs beginning in February), according to chairman Chien Fen-ren reported in Digitimes. He adds that the firm could post record sales in second-quarter 2011.
Forepi will register NT$4.5bn (US$150.56m) in revenue for 2010 (up 120% on 2009), while growth of 50% is projected for 2011, market analysts indicate. TV backlight, lighting and tablet PC applications should account for 60%, 15% and 15% of sales, respectively.
Chien notes that Japan’s Nichia and Toyoda Gosei are the LED chip suppliers for Apple’s tablet PC. However, other tablet vendors such as Samsung Electronics and LG Electronics could begin sourcing from LED chipmakers in Taiwan, which should be boost gross margin, he reckons.
With LED TV market penetration expected to rise significantly in 2011 due to falling prices, Chien expects gross margin for the sector to take a hit, but to still be maintained at 30–35% in 2011 due to new applications such as the tablet PC.
In fourth-quarter 2010, Forepi should ship 10–20 million LEDs for pico projectors, amounting to 2–3% of its quarterly revenue although average selling price (ASP) is 6–7 times higher than conventional chips, Chien says.
Forepi’s Taiwan facilities are equipped with 56 MOCVD reactors, capable of producing 12 million epitaxial wafers per month. By the end of 2011, capacity should rise to 15–20 million wafers per month.
In 2011, with projected capital expenditure totalling NT$4–5bn, Forepi’s total number of MOCVD reactors in Taiwan and China combined should rise to 126.
Forepi has also inaugurated its Jiangsu Canyang Corp LED chip subsidiary in Jiangsu, China, in which LG Display, Amtran, Unity Opto and Wooree are major investors. Its revenue for 2011 is projected to reach CNY300–500m (US$44.95–74.92m), and it could become China’s largest epiwafer maker in 2012 when it completes the installation of 50 MOCVD reactors.