UMC Puts Finishing Touches on LED Development Scheme

Taiwan LED firms boost integration and capacity

Silicon foundry United Microelectronics Corp. (UMC), together with its printed-circuit board (PCB) subsidiary, Unimicron Corp., has finally filled in the last blank on its light emitting diode (LED) deployment chart. In late September the company announced an investment, through a holding firm, in LED lighting-fixture manufacturer NeoPac Lighting (Zhongshan) Ltd., which was set up by Taiwan's NeoPac Lighting Group.

The investment is expected to make UMC Taiwan's first business group to form an integrated LED manufacturing capacity covering almost everything from sapphire substrates and epitaxy wafers to lighting modules and fixtures. This capacity will be realized when all the different manufacturers involved achieve volume production by the first quarter of 2011.

Unimicron has acquired about 10% of the US$3.1 million NeoPac Lighting, which manufactures and markets high-power LED lighting fixtures and parts. In March this year NeoPac launched a 112-watt lamp that claims energy savings of 70% and a lifespan that is five times longer compared with equivalent mercury lamps, making it ideal for replacing mercury streetlamps.

A six-inch wafer fab in the Hsinchu Science Park is being used as the research and development hub for UMC's epixay-wafer technology, the idea being to make the company's production more competitive than manufacturers that use four-inch wafer plants. Once the technology is mature, it will be transferred to a UMC factory in the Jining New & Hi-Tech Industrial Park in Shangdong Province, mainland China, for volume production.

Industry insiders say that UMC has invested an estimated US$300 million in epi-wafer, LED packaging, LED power supply, and LED lighting-fixture assembly lines in the Jining industrial park in order to turn out LED streetlights for Jining City.

This kind of investment is being encouraged by governments in the mainland, which are building infrastructure by installing LED streetlights, LED billboards, and solar panels. According to LEDiside, a Taiwanese company which tracks the LED market, the mainland's demand for LED streetlights will soar 60% to over 400,000 systems this year, up from 250,000 systems in 2009. At the same time global market demand is projected to rise 46.62%, to 870,000 lights.?

Epistar Inc., currently Taiwan's No.1 manufacturer of epitaxy wafers, is UMC's main partner in the LED sector. The two companies have jointly established Crystalwise Technology Inc. to develop and manufacture sapphire substrates, and have set up a joint venture in Jining to grow sapphire ingots.

UMC and Epistar have also co-founded a venture in Jining to produce LED chips using the sapphire substrates and epitaxy wafers produced by the two new ventures. The chips, after being packaged at UMC's venture in the Jining industrial park, will finally go into lighting fixtures assembled at the UMC Jining factory.

Spreading the Turnkey Model
UMC executives once said that they would use their investments in Jining as an example for other investments in LED turnkey capability elsewhere in the mainland to meet the needs of local projects.

The company's roadmap calls for the development of backlights for laptops and mobile phones following development in the LED sector.

LED and photovoltaic operations, the two pillars of the silicon giant's green-energy UMC New Business Investment Corp., are taking shape quickly thanks to the direct involvement of the corporate chairman, Stan Hung.

Industry watchers believe that other non-LED business groups in Taiwan will follow UMC's turnkey-operation model in entering the LED sector. Top enterprises like the Taiwan Semiconductor Manufacturing Co. (TSMC), the Hon Hai Group, and the AUO Group have also branched out into the LED-lighting and solar-energy fields in anticipation of a bright future for green-energy technologies.

Lighting manufacturer Neo-Neon LED Lighting International Ltd., for one, has already set up an integrated LED lighting manufacturing operation with epi-wafer, chip, ceramic-substrate, packaging, and assembly lines.

All this integration and capacity building will mean increased competition in LED manufacturing, which is expected to drive costs downward. Some observers predict that the price of a 6-watt LED light bulb, which can substitute for a 60W incandescent bulb, will drop to US$9.99 in 2012, down from US$19.99 now, thanks to the economies derived from huge production volumes.

Other insiders think, however, that costs will be decided not by the manufacturers themselves but by the international patent holders that license their technology to Taiwan.