The LED market has shown mixed results in different global regions recently. Stagnant LED shipment growth, and plunging sapphire substrate prices have brought related manufacturers operations under the market lime light.
Market sources confirmed Taiwan’s major sapphire manufacturer Tera Xtal Technology will be slashing 130 jobs in its factory in Yangmei, situated in Northern Taiwan. Taoyuan’s Department of Labor confirmed it received layoff notifications from the company stating the layoff would be carried in two phases.
Other market rumors have pointed towards the company plans to sell its factory and equipment in Hukou, Hsinchu. Out of its three major factories, only the Hsinchu factory is still recruiting staff including construction safety engineers, facility engineers, equipment engineers, and Patterned Sapphire Substrate (PSS) foreman.
Tera Xtal entered Apple’s supply chain and acquired sapphire home button and camera lens orders. However, rapid market developments and Chinese manufacturers’ expansions caused LED lighting demand growth to fall below expectations, leading to oversupply situation in the sapphire industry. According to LEDinside’s latest sapphire substrate price report, retail prices have plunged more than 30% in September 2015. Intense market competition in the sapphire industry has made it increasingly difficult for manufacturers to employ diversified operation models. Many manufacturers are skipping OEMs and directly supplying PSS to LED chip manufacturers.
Additionally, LED chip manufacturers are also under immense operation pressure. Thus, international manufacturers are striving to raise 6-inch LED epiwafer yield rates and product differentiation to bridge the gap between them and Chinese manufacturers.
