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Jessie Lin, DIGITIMES Research, Taipei [Friday 7 September 2012]
Digitimes Research predicts Asia-based firms will take up 90% of market demand for MOCVD equipment in 2012, an increase of 10 basis points compared to 2011. In particular, equipment demand is highest in China, with an expected share of 68% out of total global demand in 2012. Nevertheless, technology of China-based firms are still at the development stage, therefore, the competitive advantages of Taiwan-, Japan-, and South Korea-based LED chipmakers are expected to continue to thrive. In 2012, total output value of Japan-based LED firms is estimated at US$3.6 billion, with an annual growth rate of 17%. Due to successful vertical integration, total output value (including LED modules) of South Korea-based LED firms is forecast at US$3.2 billion, an on-year increase of 49.6%. Taiwan-based LED firms have been focusing on the production of LED components, hence total 2012 output value is estimated at US$1.69 billion. Excluding output value of LED models from South Korea-based firms, Taiwan is expected to outperform South Korea-based peers in 2012. Total 2012 output value from China-based LED firms is estimated at US$1.42 billion, an increase of 30% on year. China's LED supply chain has been focusing on low- and medium-power LEDs, and so has yet to become a major threat to other Asia-based players. Taiwan-based firms such as Epistar and Lextar reported an operating profit ratio of 5% in first-half 2012. For the same period, South Korea-based SOC, a subsidiary of Seoul Semiconductor, reported an operating profit ratio of 0.6%. LG Innotek expects 2012 operating profit ratio to be negative 4-6% while Samsung LED believes its ratio will be 7.3%. China-based Sanan Optoelectronics and Elec-Tech have been increasing the percentage of self-produced LED chips, hence Sanan's estimated operating profit ratio in 2012 is 24.8% while Elec-Tech predicts its LED chip gross margin to be 22.8%.
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