Asian LED Manufacturers Part Ways Over Uncertain Market Conditions

News Source: 
Liberty Times (自由時報)

LED is a fast changing industry. Asian manufacturers have taken their own paths to confront the tide of change. Japanese manufacturers are actively seeking collaboration opportunities with Taiwanese manufacturers, while Korean LED manufacturer Samsung has gradually exited the global LED market. Chinese manufacturers on the other hand are expanding production capacity on the back of government support.

Japanese manufacturers seek for Taiwanese’s collaboration

Among Asian LED manufacturers, Japanese have the most resources. Nichia and Toyoda Gosei (TG) have patent and technology advantages, and have high market shares in high-end application markets in Japan and Europe. However, they are not without worry. Japanese chips are still unpopular in the Chinese market where patents are not valued, except by certain clients.

Moreover, Japanese manufacturers are slowly losing their advantages in the high-end market. In the past, Nichia was the sole supplier for Apple iPhone backlight LEDs. However, Apple has appointed three Japanese companies as iPhone 6 backlight suppliers this year, with another Taiwanese manufacturer named as the potential supplier. This shows that Apple has been expanding its supply chain and Japanese manufacturers face immense challenges, according to an inside source. 

Aware of the market changes, Nichia’s decision of posting a company spokesperson in Taiwan in October was interpreted as a collaboration invitation with Taiwanese LED manufacturers. In response to the rise of Chinese manufacturers, Taiwanese and Japanese manufacturers should strengthen cooperation, said Nichia. When asked whether patent litigation dispute between Everlight and Nichia could be resolved, Nichia responded positively saying “It depends if the management teams have good interaction”.

Samsung withdraws from global LED market

Due to the decline of TV and mobile sales performance, South Korean Samsung Group had a rough time sustaining its upstream LED epi-wafer production. Being used to having 50% gross margin in the semiconductor business, Samsung has become uninterested in LED chips low 20% gross margin. Thus, the company exited global LED market.

Chinese manufacturers expand on back of subsidies

In the past, Chinese chips manufacturing were limited to low-end production due to the technology gap. However, with the help of governmental subsidies, Chinese manufacturers underwent capacity expansions and merges, and have slowly come into power. It was reported that San’an Opto offered to acquire Philips Lumileds shares at a high price, after the latter announced the spun off. If this happens, Philips Lumileds might use San’an Opto’s chips, and edge out other competitors' chips.

With the merger with FOREPI earlier this year, Epistar can enjoy advantages of economics of scale in the upstream LED sector. Nevertheless, depending on competing Japanese and Korean manufacturers growth conditions, the company faces a fluctuating market in the coming year.

Disclaimers of Warranties
1. The website does not warrant the following:
1.1 The services from the website meets your requirement;
1.2 The accuracy, completeness, or timeliness of the service;
1.3 The accuracy, reliability of conclusions drawn from using the service;
1.4 The accuracy, completeness, or timeliness, or security of any information that you download from the website
2. The services provided by the website is intended for your reference only. The website shall be not be responsible for investment decisions, damages, or other losses resulting from use of the website or the information contained therein<
Proprietary Rights
You may not reproduce, modify, create derivative works from, display, perform, publish, distribute, disseminate, broadcast or circulate to any third party, any materials contained on the services without the express prior written consent of the website or its legal owner.

Seoul Semiconductor's future vehicle display LED technology unveiled at SID (Graphic: Seoul Semiconductor) SEOUL, South Korea--(BUSINESS WIRE)--Seoul Semiconductor (KOSDAQ:046890), a global optical semiconductor company, will participate i... READ MORE

ALIYOS™ technology pushes boundaries of multi-segmented area lighting and enables customization of light emission patterns Characteristics such as transparency, thinness, 2.5D bendability and freedom to create new lighting effects enable... READ MORE