Sanan Opto supported by China government in developing sapphire substrates, says Digitimes Research
Deborah Lin, DIGITIMES Research, Taipei [Monday 20 August 2012]
Sanan Optoelectronics has been experiencing record high revenues and profit margins in first-half 2012. Nevertheless, the firm's inventory turnover days is relatively high showing that it is possible for the firm to experience an oversupply of LED chips, particularly in second-half 2012. Despite the fact that inventories have been growing, the firm has yet to put a stop to its expansion plans.
To avoid the risk of oversupply, Sanan has been focused on domestic demand such as buying shares of LED lighting fixture and EMC firms. The firm has been cooperating with downstream firms to obtain government projects and expand LED chip distribution in China.
Sanan began investing in the production of sapphire substrates in 2011 and has been able to obtain government subsidies. Plant completion was scheduled for 2013-2014, however, due to subsidies and completion of the plant ahead of schedule, Sanan plans to begin production in September 2012.
The China government has set a goal in the 12th Five-Year Plan to increase the percentage of domestic LED chips to 80%. With strong support from the government, Sanan seems to be one of the favored firms among China's LED industry.
Commentary: Sanan financial report scandal stirs subsidy controversy (Apr 15)
Commentary: Challenges and strategies of China LED firms (Oct 2)
Digitimes Research: China-based Elec-Tech ramping up LED chip capacity (Sep 27)
Rising sapphire ingot demand to boost Acme 3Q12 sales (Sep 21)
Sapphire substrate makers report mixed August revenues (Sep 12)
Sanan showcases LED products at China optoelectronic expo (Sep 11)
Local makers win China LED lighting subsidies (Aug 28)
Price of 40W retrofit LED light bulbs drops below US$10/unit in UK (Aug 22)
BOE eyes team up with Formosa Epitaxy, Unity Opto to set up LED epitaxial wafer plant (Aug 17)
Commentary: Epistar expands capacity while facing price competition from China-based peer (Aug 15)
Lextar sees increased July revenues (Aug 7)
Digitimes Research: Seoul Semiconductor predicts 3Q12 revenues to increase by 7-11% sequentially (Aug 3)
Unity Opto expected to hit record revenues in July (Jul 31)
Taiwan LED firms indicate mixed 3Q12 forecasts (Jul 19)
LED chip makers to see decreased shipments in 3Q12 (Jul 10)
Commentary: Can government subsidies save the LED industry? (Jun 27)