Chip Shortage in the West May Spell Windfall for Epistar

Lighting-fixture heavyweights in the United States and Europe searching for LED chips in Asia to offset inadequate in-house LED device productions  are approaching Taiwanese maker Epistar Corp., the world's No.1 blue-chip maker by quantity.

Acuity, Cooper, Hubbell, and Philips together command half of the North American lighting fixture market. Acuity, Cooper, and Hubbell do not have in-house production of LED chips and LED packages for lighting fixtures; while Philips has its own LED chip production but not in-house packaging facility.

Industry executives expect Epistar to win contracts from Western lighting fixture makers for its partnership with several packagers on low-power and mid-power LEDs, which are widely used in LED lighting fixtures thanks to high cost-performance (C/P) ratio.

Epistar executives estimate the LED lighting industry to score a double-digit annual revenue growth in 2014.

The company recently announced setting aside NT$4.5 billion (US$150 million) for expansion in 2014, with executives pointing out that the company has steadily added new equipment to boost capacity in line with customer requests.

They say over the past few years the company's high season could last as long as six months to strain capacity, with capacity running at 70% even during low season.

The executives forecast the high season for 2014 would arrive in late January or early February, to bode well for Taiwan's LED chipmakers and packagers after the upcoming Chinese New Year holidays.

The company plans to double the number of metal organic chemical vapor deposition (MOCVD) chambers at its  China factories to 100 in 2015. Its executives point out that the new machines the company will purchase in 2014 will handle at least 14 epitaxy wafers each time, compared with five or six wafers currently. (KL)