Nanya Photonics Wang Points Finger at Chinese Overcapacity for LED Lighting Woes

Nanya Photonics Inc. Chairman Wilfred Wang has indirectly summed up the massive impact of China on the information technology and electronics sector in Taiwan and globally, by describing the global light emitting diode (LED) industry as a miserable business and predicts many uncompetitive manufacturers will likely go under this year due chiefly to consistent overcapacity at mainland Chinese manufacturers.

However, Wang, whose company is a member of the Formosa Plastics Group (FPG), widely recognized as Taiwan's largest petrochemical business conglomerate, expects the industry to return to more orderly state soon in consideration of mainland China's cancellation of subsidies to the industry, which discourages the mainland's manufacturers from expanding capacity or forces the mainland Chinese manufacturers into desperation, implying that such makers in China cannot compete or survive independently without governmental subsidies. 

Nanya Photonics makes LED chips and LED lamps. Wang points out that the company's chip business is treading water due to the mainland's overcapacity, with its lighting business also racked by fierce competition.

Nevertheless, Wang remains confident of the company's operations, saying that his company has shifted focus to the industrial lighting market from household lighting market by providing integrated manufacturing service covering project design, simulation, installation and testing.

He points out that industrial lighting calls for relatively more complex technologies than household lighting to push his company to pursue higher know-how. For instance, his company is working on a project to minimize eye fatigue caused by the lights at FPG's Fujian Fuxin Special Steel Co., Ltd. in mainland China, with the challenging task to maintain adequate illumination.

After providing total lighting solutions to FPG's subsidiaries, including Fuxin, Formosa Ha Tinh Steel Corp. in Vietnam, and Nanya Plastics Corp., his company is promoting solutions outside the group, having counted Costco of Taiwan among its customers and promoting lighting solutions to FPG's American customers.

Believing supply glut to be the main culprit, Wang feels that the huge overcapacity in the industry has to be cleared before the LED industry can return to a healthy state this year, adding that even Japanese makers are being pummeled amid the excessive supply.