Global shipments of metal-organic chemical vapour deposition (MOCVD) systems will fall by 46% year-on-year to a total of 148 units in 2013, a report forecasts, as LED chipmakers have sufficient capacity and the number of LED chips used in LED TV backlighting has been decreasing.
US-based Veeco Instruments is predicted to continue dominating the MOCVD system market, with 60.2% market share in 2013, due mainly to orders from China-based firms. Germany-based Aixtron is expected to rank second, with 35.8% market share. Some China-based MOCVD system makers have begun shipments of multi-wafer MOCVD systems.
As China’s 12th Five-year Plan promotes domestic supply of LED production equipment, the government has been supporting China-based makers developing MOCVD equipment since 2011. Consequently, four China-based firms - Tang Optoelectronics Equipment, Advanced Micro-Fabrication Equipment Inc, Brilliant Light Technologies and Ideal Energy Equipment - are gearing up for production of MOCVD systems. In particular, Tang Optoelectronics claims that its MOCVD equipment can produce LED chips with luminous efficacy of 155lm/W.
Although these firms have yet to pose a threat to the top-two players, a few China-based LED chipmakers have begun to adopt locally made equipment.
Since local governments have ended subsidies for China-based LED makers procuring MOCVD systems, and total LED production capacity is 20-30% in excess of demand in China, the MOCVD market has been in favor of buyers, says the report. As a result, Veeco and Aixtron have faced bottlenecks in marketing MOCVD equipment due to shrinking demand and less price competitiveness, the market research firm adds.
Mainly because of the slump in demand and new competition, Veeco and Aixtron are said to have lowered quotes in the China market from about US$2m to about US$1.4m for a single-wafer MOCVD system and by 30-40% for a multi-wafer model.
Nevertheless, China is expected to account for as much as 62% of global demand for MOCVD equipment in 2013, because some firms have applied for subsidies but have yet to use them (hence these subsidies have extended into 2013). In addition, tier-two chipmakers in China are expected to continue expanding capacities in 2013.