London (Oct. 17, 2013)—Chinese die vendor San’an is projected to take the lead in gallium nitride light-emitting-diode (GaN LED) wafer capacity by the end of 2014, overtaking current leader Epistar of Taiwan, according to IHS Inc. (NYSE: IHS).
While Epistar is forecast to continue its spot at the pinnacle this year and through most of 2014, its run at the top will end sometime in the fourth quarter when San’an takes over.
Wafer capacities are calculated by IHS based on tracked metal organic chemical vapor deposition (MOCVD) installations, and San’an’s potential lead is dependent on a planned installation of new machines in 2014. “The second-phase fab of San’an in Wuhu is ready for another 100 GaN LED MOCVD tools in addition to the 100 that had been installed in 2011,”,said Alice Tao, senior analyst for LEDs and lighting at IHS.
All told, San’an could reach 10.8 percent of wafer capacity by the fourth quarter of 2014 in 2-inch-equivalent wafer capacity, followed by Epistar with a forecast 10.1 percent, LG Innotek with 6.8 percent and Samsung LED with 6.1 percent, as shown in the attached figure.
To be sure, the rankings can change depending on what is being measured. For instance, Epistar remains the top manufacturer for yielded die and binned die, even by the end of 2014. Also, companies such as Nichia of Japan, Osram of Germany, North Carolina-based Cree and Philips Lumileds of California rank high in terms of actual revenue when utilization rates and pricing are considered, even though the four manufacturers are not in the Top 5 when it comes to unprocessed wafer capacity.
While San’an’s capacity is double that of any other Chinese-headquartered manufacturer, other companies in China, such as HC Semitek, Elec Tech and Focus Lightings, are also expanding capacity. This is true despite continued overcapacity in the industry and even if some Chinese makers have been less than successful.
China was the primary destination last year for, most MOCVD shipments. The country’s prominence in the market appears uncontested for the short term, accounting for 80 percent of shipments this year and 85 percent in 2014. In comparison, shipments and orders will be low in other regions. As a result of both factors, Chinese companies are predicted to increase their overall share of the market.
Many Chinese manufacturers had jumped into the market or had expanded their capacities in 2011 when subsidies from local governments were available, However, most top suppliers continue to be based in other areas, including the Western Hemisphere, South Korea, Taiwan and Japan—many of these holding the strongest intellectual property portfolios.
Outside of Asia, Chinese companies are not particularly strong. No China manufacturers, for example, appear in the Top 10 for packaged LEDs. This makes the anticipated rise of San’an to the top in wafer die capacity by the end of next year even more striking.
More information on this story can be found in the IHS “GaN LED Supply and Demand” report, which ranks the Top 20 companies by quarter for wafer capacity, die capacity, yielded die capacity and binned die capacity.
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