Expansion Halts at South Korean LED Makers to Benefit Taiwan's Makers

Taipei, June 22, 2011 (CENS)--Taiwan's LED chipmakers are expected to breathe easier when South Korea's top LED chipmakers have reportedly decided to halt their expansion plans.

According to LED-equipment suppliers, leading South Korean LED chipmakers have recently decided to shelve their expansion plans because of slower-than-expected demand for LED backlights for liquid crystal display (LCD) TVs and inferior cost efficiency relative to Taiwan's manufacturers. Among them Samsung has set aside part of its backlight chips for lighting purposes to ease pressure on oversupply.

These South Korean manufacturers launched bold expansions beginning early last year, planning to add a total of 600 metal organic chemical vapor deposition (MOCVD) chambers. However, they have stopped at only 150 to 200 MOCVDs.

Industry executives pointed out that the expansion halts are a windfall to Taiwan's chipmakers, including Epistar Inc., Formosa Epitaxy Inc. and Genesis Photonics Inc.

They added that reported cuts of sapphire-substrate prices in the third quarter would further boost gross margin of Taiwan's chipmakers. Chipmakers grow LED substances on the substrate.