Neo-Neon to slow down LED epitaxial wafer expansion

Neo-Neon Holdings will downsize capacity expansion for LED epitaxial wafers due to fears of an oversupply of LED chips used in backlight units of LCD TVs by decreasing installation of additional MOCVD equipment from its originally planned 50 sets by the end of 2011 to up to 30 sets, according to the company's Taiwan general manager Cheng Chien-wen.

Neo-Neon has three LED epitaxial wafer factories, two in Jiangmen, southern China, and the other in Yangzhou, eastern China. One factory in Jiangmen currently has 14-15 MOCVD sets for a monthly capacity 30,000 2-inch epitaxial wafers which can result in a total output of 300 million LED chips for lamps, one million high-power LED chips, and 70 million SMD LED chips, Cheng indicated.

The Yangzhou factory will install five MOCVD sets in December and start production in January-February 2011, while the other factory in Jiangmen will install 5-10 MOCVD sets by the end of 2011. Thus, the three factories will have up to 30 MOCVD sets by the end of 2011, Cheng pointed out.

The possible oversupply of LED chips used in backlight units is because TFT-LCD panel makers have been expanding capacity for LED chips among subsidiaries to increase in-house supply, Cheng pointed out.

In related news, Taiwan-based fellow makers Tekcore and Formosa Epitaxy have delayed installing additional MOCVD equipment for the time being.