China-based LED firms have been producing low-priced LED chips causing oversupply in the upstream LED chip segment to continue.China-based panel maker BOE recently announced plans to set up a new 8.5G production line in Hefei,and also hopes to construct a LED epitaxial wafer plant with Taiwan-based LED firms.
Taiwan-based LED chipmaker Formosa Epitaxy and packaging house Unity Opto are said to be joining BOE on the project.
Formosa Epitaxy and Unity Opto have been long-term strategic partners providing TV backlights for South Korea-based customers.In 2011,Unity Opto signed a supply agreement with BOE and became the main producer of LED backlights for BOE panels.As BOE begins production using its 8.5G lines,demand for Unity Opto backlight units(BLUs)increased significantly in 2012.The firm expects shipments in the third quarter to continue showing growth.
BOE has been considering building LED chip capacity.Due to cost efficiency and yields,the firm switched to a joint venture model and hopes to secure Taiwan-based LED chipmakers as partners.The joint venture is likely to be finalized by the end of 2012.
Formosa Epitaxy and Unity Opto have not responded to the rumors.
According to Formosa Epitaxy,in addition to South Korea-based customers,the firm is receiving orders from China and Japan in the third quarter.As for Unity Opto,the firm noted that its Beijing plant is under construction and the plant in Yangzhou is supplying directly to demand in China.
Facing oversupply and low prices for LED chips from China,Formosa Epitaxy noted that China-based LED firms have not yet been able to enter the TV BLU market because of quality.