Waning market demands, price wars and severe oversupply of LED chips in LED industry has urged Nan Ya Photonics Incorporation (NYPI), a subsidiary of Formosa Plastics Group, to  announce earlier this week its exit from the upstream LED EPI-wafer manufacturing business, and shift its focus to downstream market, including light bulb production and lighting system.

NYPI’ vertical integrated production capacity includes LED EPI-wafers, LED chips, and LED packages. NYPI was originally a wholly-owned subsidiary, before it formed a partnership with Taiwanese LED chip manufacturer Epistar. Formosa Plastics Group and Epistar each hold 50% of stake in NYPI. Chinese government’s recent LED subsidies led to booming EPI-wafer production capacity and caused oversupply, the company has reported losses of more than NT$ 10 million (US $304,650) in 2014, which escalated to more than hundreds of millions New Taiwan Dollars in 2015. As a result, NYPI and Epistar both agreed to put a halt to losses, and decided to end the money losing EPI-wafer business. The company is to transfer 10 to 13 equipment to Epistar in the near future.

Commenting on the oversupply situation in China and its impact on the LED industry at an year-end party in 2015, NYPI Chairman Wilfred Wang said: “the LED industry is a miserable market with wave of bankruptcies projected in the near future.” Shortly after he made this remark, NYPI decided to retire from the LED Epitaxy wafer market. However, Formosa Plastics Group stressed that the company has not deviated from its  green energy technology investment, the shift from upstream to downstream market is sheer adjustment for improved operation. There are no planned layoffs following this particular company restructure.

(Translator: Emma Chang, Translator, LEDinsidehttp:// Editor: Judy Lin, Chief Editor, LEDinside)