Trade Resources Industry Views Taiwan- and China-Based LED Makers Are Expected to Lay The Emphasis on Market Share Gains

Taiwan- and China-Based LED Makers Are Expected to Lay The Emphasis on Market Share Gains

Taiwan- and China-based LED chip makers are expected to lay the emphasis on market share gains over the next two years, instead of profitability which was primarily considered in the past, according to chairman Lee Biing-jye for Taiwan-based LED epitaxial wafer and chip maker Epistar.

Because significant government financial assistance is available for China-based LED makers under China's 12th Five-year Plan, Taiwan-based makers have been under large competitive pressure related to production costs, Lee said. Since the plan will end in 2015, Taiwan-based makers hope that the competitive disadvantage will vanish in two years, Lee said.

Following China-based LED chip maker Sanan Optoelectronics' stake investment in Taiwan-based Formosa Epitaxy, Taiwan- and China-based LED chip makers will basically belong to two main groups, an unorganized one led by Epistar and an alliance of Sanan, Formosa Epitaxy and other China-based makers, Lee indicated.

Sanan, Epistar's largest China-based competitor, usually adopts direct price-cut competition with Epistar, always quoting 15% lower than Epistar's quotes, Lee pointed out.

While Epistar has about 300 MOCVD sets and Sanan and Formosa Epitaxy together have 277, reducing production cost mainly depends on improving processes and thereby yield rates, instead of expanding production capacity, Lee stressed. With considerable advantages in intellectual property and product quality over China-based competitors, Epistar has to reach a firm global market share over the next two years, Lee said. For the China market, Epistar plans to rely on its joint ventures to compete with China-based makers, Lee noted. Epistar has set up three main joint ventures in northern, eastern and southeastern China.

For LED lighting, Epistar has two international vendors as main clients, Lee said. Global LED lighting penetration is on the rise, from 8% in the first half of 2013 to over 10% for the whole year, and rising to 20% in 2014, Lee forecast.

Source: http://www.digitimes.com/news/a20130904PD217.html
Contribute Copyright Policy
Taiwan, China LED Makers to Focus on Market Share Gains Over Next 2 Years, Says Epistar Chairman
Topics: Lighting