Taiwan-based LED chipmaker Epistar and Japan-based Toyoda Gosei have signed an agreement to set up a joint venture for the China market.
According to Toyodo Gosei, the LED market in China has been plagued by price competition making it hard for Japan-based firms to enter. Toyoda Gosei stated the joint venture will be able to compete with peers in 2013 and hopefully will be able to obtain projects.
The LED chip products from the joint venture will be supplied by Epistar, which means Epistar's share in China's medium-level and high-end market will expand.
According to Biing-Jye Lee, chairman of Epistar, high-power LED chip prices continue to fall and to lower production cost, some Europe- and US-based firms have been issuing OEM orders to South Korea-based firms. Taiwan-based firms are likely to receive this type of orders soon, said Lee.
Lee added that in the past, lighting LED chip quotes were higher than those for backlighting applications. But due to the fact that the backlight chip market has been in oversupply, downstream customers have been trying to use backlight chips for lighting applications, narrowing the price gap between the two segments. The price drops for backlight chips have been pushing down the prices for lighting chips and also prompting Europe- and US-based firms to issue OEM orders instead of using in-house production.
As for LED TV penetration rates, Lee expects CCFL-backlit TVs to exit the market in 2013 due to the rise of direct-lit LED TVs.
Furthermore, Lee added, the overall market demand will continue to grow in 2013 but price will fall another 20-30%.
