Nichia Corporation Changes Plan to Tap LED Market in China

Taipei, Nov. 1, 2012 (CENS)--Japan-based Nichia Corporation, a major light emitting diode (LED) maker, planned to tap LED markets in China and enlarge its market share there, but has been foiled by simmering anti-Japan sentiment in China due mainly to the Diaoyutai island issue, so is considering to cooperate with Taiwanese enterprises for further development, according to wire news.

Two Taiwanese companies, namely Hon Hai Group, the world's largest electronic contract manufacturer, and Epistar Corporation, the leading epitaxy maker in Taiwan and member of Nichia's supply chain, will be part of the joint venture.

According to senior Nichia executives and based on positive outlook towards widespread use of LED lighting, the firm focused on the ample business potential in China, having invested at least renminbi 20 billion or about NT$40 billion (US$1.33 billion) to expand production lines and sales footholds in China this year.

For instance, excluding the footholds in Beijing and Shanghai, to cope with rising demand in China, the firm planned to extend distributorships in Guangzhou, Southern China, as well as increase production capacities 20% there.

Influenced by anti-Japan sentiments due to the sovereignty of the Diaoyutai islet, many Chinese operators refuse to choose LED components from Japan, which compounds Nichia's attempt to encroach on the long-established presence of Holland-based Philips and America-based Cree in China, all of which cast shadow on the rapid progress made by Nichia in China.