The LED lighting market value will rise 47.8% to reach US$35.3 billion by 2014, compared to 2013, according to projections by LEDinside. In addition, LED lighting penetration rates are expected to increase 32.7%, with bulb and tube penetration rates at 20% and 15%, respectively. To meet new LED bulb and tube market demand in 2014, an estimated 250 MOCVD sets will be required.
Observations from LED chip maker utilization rates in 2013 showed top Taiwan and China LED chip makers' production capacity is still high. However, there is still a large number of idle MOCVD sets in China. The equipment is mostly owned by small makers, and under an increasingly competitive pricing environment, costs are overtly high for small makers to utilize their MOCVD equipment. Small makers are expected to gradually drop out of the LED supply market.
LED lighting demand increases indicate competitive LED chip makers will continue to expand production capacity in 2014. Aside from raising yield rates, days of machine operation, and number of operations, it is estimated large LED chip makers will acquire MOCVD equipment from small makers to expand production capacity. Looking at MOCVD equipment expansion, after placing an order, LED chip makers need to wait for MOCVD makers to ship the machine, install, and make adjustments. In other words, new equipment purchased cannot provide production capacity in a short period of time, therefore, the possibility of large LED chip makers acquiring small makers to expand production capacity has greatly increased. This is the only way that manufacturers can be equipped to face production capacity challenges in the fast growing LED lighting market, LEDinside added.
