Sanan Optoelectronics, China's largest LED firm, has been aggressively entering Taiwan's market in 2012. According to market observers, Sanan's sales in Taiwan reached CNY10 million (US$1.57 million) in July and expects 2012 sales to exceed CNY100 million. The observers noted that in first-half 2012, Sanan's Taiwan business reached CNY40 million.
According to the observers, Sanan currently has more than 90 units of MOCVD equipment that produces blue LED chips. Some equipment have been going through testing. Sanan has been posing particular challenge for Taiwan-base LED chipmaker Epistar by quoting 30% lower than Epistar's prices. The quality may not be comparable, but the price remains attractive.
Compared to the inventory level in 2011, Sanan's 2012 inventory level has been relatively low. Nevertheless, Sanan has yet to achieve full capacity utilization rate.
According to a company press release, Sanan has been investing in a plant in Anhui, China. The first stage investment reached CNY6 billion and has procured 103 units of equipment. By end of first quarter 2012, 70 units of equipment had begun production. However, the LED subsidy program provided by Anhui's provincial government is ending on December 31, 2012. Hence the firm may reconsider moving to the second stage.
The observers believe Sanan's success in Taiwan means the quality and technology of China-based upstream LED firms are close to Taiwan-based peers. In addition, Sanan's relatively low inventory level in 2012 means demand in LED market has been growing rapidly.
