Taiwan Boasts World's Largest LED Capacity in 2011; 27 New LED Fabs Going Up In Asia This Year
Demand for Equipment Rising: Heavyweights Converge on LED Manufacturing Section at SEMICON Taiwan
LED application products -- tablet computers, LED TVs and smartphones -- are all the rage, fueling the rapid rise and proliferation of Taiwan-based LED businesses. Corporations such as AU Optronics (AUO), TSMC and CHIMEI have all crossed over into the LED industry, forging yet another trillion-dollar industry in Taiwan. SEMI Opto/LED Fab Forecast has projected 27 new LED fabs starting operation in the Asia region (excluding Japan) this year. Of these, 17 will be built in China and 7 in Taiwan.
The global application of LCD backlight modules across a broad spectrum, combined with the rapid growth of lighting compliant with new efficiency standards, has generated huge demand on the LED market. During the LED panel discussion at SEMI Taiwan in March, Lin Chi-Hsun, head of the Industrial Economics and Knowledge Center (IEK), Industrial Technology Research Institute (ITRI), shared the outlook of LED market for 2011, “The scale of the high-brightness LED market is expected to reach US$ 14.1 billion, and grow to US$ 18.9 billion by 2015. Markets for LED TV's and LED monitors will continue to grow.” Lin also pointed out that emerging nations in Asia are growing fast, and their share of the market has continued to expand without interruption. South Korea has now taken the helm in the LED-TV backlight market, and China's burgeoning LED capacity and productivity will be the biggest variables influencing market development.
The policies to light up a thousand kilometers of roadway with 100,000 high-powered LED streetlights and ten cities with 10,000 LED streetlamps have clearly shown China's resolve in promoting LED technology on a grand scale. "China is currently the world's largest LCD TV and automotive lighting market, and the world's second largest lighting market," said Lin. A source at Formosa Epitaxy mentioned that China invested close to CNY 30 billion in the LED industry in 2010. Approximately 50% of this investment went to mid and upstream ventures. China may have completed the LED supply chain, but it still relies upon Taiwan imports for most of its key equipment and components.
Looking at production capacity, based on the latest report of SEMI Opto/LED Fab Forecast, global LED capacity will reach 4.39 million wafers per month (in 2-inch equivalents) in 2010. Citing strong demand for LCD backlights as the driving force, SEMI has projected 47% growth in capacity, to approximately 6.46 million wafers per month (in 2-inch equivalents) in 2011. Taiwan is expected to claim the largest capacity this year in terms of LED epitaxial wafers, followed by China, Japan and Korea.
2011 LED Capacity by Region
Source: SEMI Opto/LED Fab Forecast May 2011
In terms of the LED equipment spending, there was explosive growth from LED fabs, jumping from $624 million in 2009 to $1.78 billion in 2010. SEMI expects the LED equipment spending spree will continue this year to reach about $2.57 billion, a 40% increase year-over-year. However, if some of the projects do not ramp up as quickly as planned, there could be some spending "delay" to 2012. Still, we remain optimistic about the investment level in 2012 exceeding $2.5 billion worldwide. Most of the investment will be from the new LED fabs in China and Taiwan.
Taiwan possesses a major advantage in LED manufacturing, while China possesses the market and the capital. The most important LED market and the most capital are all here in the Greater China Region. Aiming to provide a better communication platform for manufacturers and suppliers, SEMI formed an LED Committee in Taiwan in April 2011. In the past 40 years, equipment providers have had great success in improving yield and raising manufacturing capacity for the semiconductor industry. SEMI, as a global industry association, can help with best practices— including the manufacturing technologies, standards and trade shows from our worldwide members, to assist Taiwanese LED manufacturers to expand their market around the world.
Exhibit at SEMICON Taiwan LED Pavilion
To demonstrate the great capability of LED manufacturing and the complete LED supply chain in Taiwan— from wafer, IC, applications and manufacturing equipment and materials— a special exhibition area called the LED Pavilion will be held in conjunction with SEMICON Taiwan 2011 (Sept. 7-9). So far, industry players such as Brewer Science, EAG, Force Precision Instrument, MDI, MEC-K, Mitsuboshi Diamond, Newport, SEMCRO, TECDIA and Ying Lyu Technology are all confirmed to exhibit at the pavilion and an LED international Forum will also be held during the show. It is an ideal platform for equipment suppliers to meet customers and build business partnerships in the Greater China Region.
Visit www.semicontaiwan.org for more information and call SEMI Taiwan (TEL: 886.3.573.3399 ext. 214) to exhibit.
June 8, 2011