LED chipmaker Formosa Epitaxy plans to increase its total number of MOCVD equipment in Taiwan and China mainland to 104 by the end of the first quarter in 2013 due to an optimistic outlook about market demand.
Demand in the LED backlight market has been cooling down, therefore, Formosa Epitaxy reported falling revenues for both October and November 2012. The firm saw urgent orders in December and increased capacity utilization rates, but shipments to customers will begin in January 2013, hence December revenues are likely to reflect the low season as well.
Formosa Epitaxy has been focusing on producing blue LED chips. The firm's plant in Taiwan currently has 55 MOCVD sets, and the firm plans to add 12 units more between fourth-quarter 2012 and first-quarter 2013 to increase the total number to 67 units. The firm's China subsidiary currently has 37 units of MOCVD equipment, hence after the current capacity expansion has been completed in Taiwan, the total number of sets in Greater China will be 104 units.
Formosa Epitaxy announced in November 2012 plans to accept a capital injection from China-based Sanan Optoelectronics through private placement and Sanan will own 19.9% of shares.
According to Digitimes Research, cooperation between Formosa Epitaxy and Sanan Optoelectronics will be beneficial for both firms. In 2012, Sanan had a total capacity of 144 MOCVD sets, and in particular, 22 units were used to produce AlGaInP LEDs while others were used to produce blue LED chips. Sanan plans to add 100 units of equipment and expects to reach full capacity in 2014, said Digitimes Research.
Formosa Epitaxy noted that with the capital injection from Sanan, the firm plans to continue expanding capacity in Taiwan.
