Global LED lighting to reach USD35.3 billion by 2014
LED lighting penetration rates are expected to increase 32.7%, with bulb and tube penetration rates at 20% and 15% respectively. To meet new LED bulb and tube market demands in 2014, an estimated 250 MOCVD equipment will be required, according to Jack Kuo, Senior Analyst, Trendforce.
Observations from LED chip manufacturer utilization rates in 2013 showed top Taiwanese and Chinese LED chip makers production capacity is still high. However, there is still a large number of idle MOCVD equipment in China. The equipment is mostly owned by small manufacturers, and under an increasingly competitive pricing environment, the costs are overtly high for small manufacturers to utilize MOCVD equipment. Small manufacturers are expected to gradually drop out of the LED supply market.
LED lighting demand increase in 2014 indicates competitive LED chip manufacturers will continue to expand production capacity in 2014. Aside from raising yield rates, days of machine operation, and number of operations, it is estimated large LED chip manufacturers will be acquiring MOCVD equipment from small manufacturers to expand production capacity.
Looking at MOCVD equipment expansion, after placing an order, LED chip manufacturers need to wait for MOCVD manufacturers to ship the machine, install, and make adjustments. In other words, new equipment purchased cannot provide production capacity in a short period of time, therefore, the possibility of large LED chip manufacturers acquisition of small manufacturers to expand production capacity has greatly increased. This is the only way that manufacturers can be equipped to face production capacity challenges in the fast growing LED lighting market.
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