Supply of LED chips produced by China- and Taiwan-based makers has been tight and the situation will remain until the third quarter of 2017 when major China makers ramp up their new production capacity, according to China-based LED packaging service providers. The tight supply partly stems from strong demand for LED lighting and fine pixel pitch displays.
The tight supply has shot up LED device prices 10-15% since the end of 2016.
Epistar, the largest Taiwan-based LED epitaxial wafer and chip maker, has strategically selected orders to cope with the tight supply and has seen orders for blue-light LED chips 30% over the corresponding production capacity, according to the company.
Orders for LED chips for 5mm-thick chip-scale packaging for backlighting of LCD TVs from South Korea- and China-based TV vendors are expected to increase soon, said Epistar, which also looks to potential growth in demand for infrared LED chips for iris recognition, range finding, VR (virtual reality), AR (augmented reality), smart wearable and surveillance devices.
China-based LED chip makers, including San'an Optoelectronics, Huaian Aucksun Optoelectronics Technology and HC SemiTek, are expanding production capacity by adding 200 MOCVD sets, with the additional tools to come into operation beginning August 2017, the sources said.