© siarhei tsalko dreamstime.com Analysis | May 30, 2014
Chinese LED market demands soar
Sapphire substrate manufacturers deploy market strategies as demands from Chinese LED market soar
The Chinese LED market has seen a rapid rise in demands. Expansion plans by several LED chip manufacturers boosted sapphire substrate demands. Sapphire substrate manufacturers are speeding up Chinese market strategies, due to high tariffs and emergence of Chinese LED chip manufacturers, according to the latest “2014 Global Sapphire Substrate Market Report” by LEDinside, a research division of TrendForce. First-tier LED manufactures initiated expansion plans this year, benefiting from strong demands brought by the LED lighting market. Major chip manufacturers are pushing to increase production capacity in 2014 to stabilize market share and satisfy market demands, including Epistar, Nichia, and Chinese chip manufacturers San’an Opto, Nationstar, HC SemiTek, HuaLei Optoelectronics, and Tongfang Optoelectronics. Chinese first-tier LED manufacturers have been especially progressive in speeding up production expansion and raising production utilization rates in order to secure a larger share of the lighting market, which in turn has driven up sapphire substrate demands used in LED industry. San’an Optoelectronics for example, currently has TIE wafer capacity of around 420,000 pieces /M for 2014. The company has already set in motion production expansion plans, and estimates production capacity can reach 650,000 pieces /M by 2015 if all 100 MOCVDs enter production. Additionally, Epistar secured a leading position in the LED chip industry’s production capacity and revenue after years of acquiring a number of LED chip manufacturers. However, with Chinese LED manufacturers right on their heels, the company is also actively expanding production capacity in order to maintain a competitive edge. In regards to sapphire substrate market value in the LED application sector, China has grown substantially from 8 percent global market share in 2010 to 24 percent in 2014, according to data compiled by LEDinside. LEDinside projects future sapphire substrate demands for LED application will majorly come from China. Therefore, China is estimated to make up 33 percent of LED sapphire substrate market value by 2016. Consequently, global sapphire substrate manufacturers are quickly deploying business strategies in the Chinese market as demands in the China market take off, and import tariffs are taken into consideration.
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