Following the announcement on June 30 that Epistar is acquiring Formosa Epitaxy (FOREPI), Epistar will have over 400 MOCVD reactors including those from FOREPI's China subsidiaries, more than double the GaN MOCVD of its nearest competitor, according to IHS.
As a result, Epistar will now take an even clearer lead as the number one GaN LED die and wafer supplier. Epistar's projected wafer capacity share of 11% in the fourth quarter of 2014, added to FOREPI's 4%, will mean that the newly united group will account for 15% of total global capacity. Meanwhile at the packaged LED level, Nichia is the market leader with 12.5% as of the first quarter of 2014, said IHS.
The merger may come at a good time for Epistar, which also leads for yielded die and binned die in addition to GaN wafer capacity. Leading LED companies have long since recovered from the 2011-2012 time period when capacity utilization was very low, and Epistar and others have had stable, high-capacity utilization rates for some time now. At the same time, the oversupply seen from 2011-2013 is projected to greatly reduce from 2014-2018 because of increased demand in lighting, added IHS.
IHS said that the current wafer surplus is projected to reduce from 27% in 2013 to 10% in 2014, and will be below 10% from 2015-2018, mostly due to the expansion of the lighting market as LED lamps and luminaires gain share, at the expense of traditional technologies.
Revenues from GaN packaged LEDs in lighting applications are projected to grow from US$5.2 billion in 2013 to US$6 billion in 2014, and rising to US$6.8 billion in 2015. Shipment growth is even stronger, with 2015 shipments forecast to be almost double those of 2013, the firm believes.
Overall, GaN MOCVD installation is forecast to reach 257 reactors in 2014, with 830 reactors to be needed for the four combined years from 2015 to 2018 inclusive.The top purchasers of MOCVD in 2014 are projected to be leading China companies like Sanan and HC Semitek. Both announced plans for 200 MOCVD reactors recently, said IHS.
Sanan stated it will invest CNY10 billion (US$1.6 billion) to purchase 200 MOCVD reactors in Xiamen, while HC Semitek anticipates to reach 200 MOCVD by 2016. However, not all LED companies historically have ordered as many MOCVD as they initially estimated. The top-10 purchasers are expected to have a 89% market share in 2014 as leading suppliers continue to grow strongly; in comparison, smaller companies and new entrants that joined the market in recent years have often failed to see growth in this competitive market, added IHS.
