China-based LED firms Sanan Optoelectronics entered the Taiwan market in 2012, heating up competition and causing LED chip prices to fall. Some firms believe Sanan may become relatively slower in improving technology and others believe the firm will cause major negative impact on Taiwan-based firms due to its fierce price competition and superior government funding.
Genesis Photonics and TSMC Solid State Lighting (SSL) believe Sanan will slow down in technological improvement in 2013. According to Genesis Photonics, Sanan plans to enter the high-power LED market but due to the relatively higher technological barriers, it will likely take the firm some time to reach comparable quality to Taiwan-based makers'.
President Jacob Tam for TSMCSSL stated it is unlikely for Sanan to enter the high-end technology segment and the firm's technological improvement for its LED chip technology is likely to come to a temporary halt.
Robert Yeh, chairman of Taiwan-based LED packaging house Everlight, noted that Taiwan-based firms have no need to lower price in 2013 as Sanan's technology is about six months behind compared to Taiwan-based peers.
In addition to entering the market, Sanan also began cooperating with Taiwan-based LED chipmaker Formosa Epitaxy. Market observers believe Sanan's sales from Taiwan-based firms accounted for 4% of total sales in 2012 and this figure is likely to increase to 6% in 2013.
