Taiwanese Manufacturers Benefit from AlInGaP LED Shortages Caused by VR Applications

Rising VR, security and small pitch LED display demands has led to severe shortage in AlInGaP LEDs, reported Chinese-language newspaper Commercial Times.

Drivers behind the recent shortage include large demands of IR LEDs in VR headgear, where 30 to 40 IR LEDs are required for motion sensors and others in the device. Additionally, rising IR LED demands from airport security, additional sensors built into smartphones, wearables and industrial applications are also rising. All these led to a new wave of AlInGaP LED demands, and fine pitch RGB LED displays, shorter pitch distances have also raised image resolution leading to higher consumption of ultra-bright red LED productions. All these have been the main drivers consuming AlInGaP LED production.

As for large scale blue LED applications, plummeting prices from last year urged Epistar to reduce production capacity by 25%, and it has been selective in the orders it took to stabilize LED retail prices. Since entering the peak season in third quarter, the company’s demands has slowly rose, but large LED chip manufacturers have been conservative in taking orders, and are turning down low profit orders.

Everlight EPS tops competitors

Everlight initiated pilot productions at its billion New Taiwan Dollar new fab in Miaoli County in Taiwan, with the aim of rolling out mass production by fourth quarter of 2016. Production from the fab is to contribute to the company’s revenue by 2017, raising LED components production by at least 25% to 100 million LEDs. Profits for automotive LEDs are expected to reach new heights by 2018.

Everlight’s new factory was scheduled to enter mass production by second quarter in 2016, but mass production has been delayed to fourth quarter. Production was pushed back mainly because of the longer authorization process required by automobile lighting clients, said Everlight Chairman Robert Yeh.

Epistar expands AlInGaP production

Taiwanese LED manufacturer Epistar started to expand its production capacity as of second quarter of 2016 to meet AlInGaP LED demands, despite the added production capacity, the company still ran into production shortages. The company has 47 MOCVDs for AlInGaP production with plans of converting another 13 old blue LED MOCVDs into red LED production. A rare scale up of AlInGaP LED production in recent years.

Epistar was surprised by recent high demands for AlInGaP LED, and revealed it has not seen this for years. The company’s AlInGaP LED order visibility extend well into October, many clients are still on the waiting list, basically Epistar has run into an AlInGaP LED shortage. The company’s full production utilization situation will extend well into third quarter, and its AlInGaP LED revenue share is about 20% to 25% of its total revenue. The company’s high brightness AlInGaP LED previously was a niche market product, and IR LEDs are usually priced several times higher than the same sized blue LED chip, hence AlInGaP LED has been Epistar’s main source of stable revenue.

Bright LED Electronics product portfolio turns around losses

LED package manufacturer Bright LED Electronics revenue has rebounded, as its non-visible LED product revenue share reaches 40%. The company’s main products are sensors in printers, robotic sweepers, and robotic arms. Additionally, the company is starting to receive revenue from government streetlight projects since May this year, which will total NT $ 360 million. The company aims to restructure its product portfolio, and investment institutes project the company’s revenue will reach double digit growths by 2016, and successfully turn around its losses.

Bright LED Electronics capital is valued at about NT $1.97 billion, and is a veteran in LED packaging in Greater China region. The company’s profits were eroded in recent years due to investment losses, and from May 2016 its revenue jumped 18.58%, rising 6.26% since April. The company’s accumulated revenue from the first five months of 2016 reached the same levels as 2015.

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