LED TV Feature Story (3): Increasing demand for LED-backlit TVs, LED manufacturers launch capacity expansion plans

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Samsung has invested USD 1 billion in its LED TV promotion campaign, bringing such TVs in the limelight of the market since the 2Q09. Other major TV brand vendor also raised their LED TV shipment targets for 2010, and launched capacity expansion plans at the same time. According to the research institute LEDinside, the total capital expenditure of Taiwan’s LED chipmakers will reach NTD 13.5 billion in 2009, a 24% growth compared to last year. The capital expenditure of upstream LED chip suppliers will amount to as high as NTD 9.7 billion, and that of LED packagers will be around NTD 3.8 billion. In 2010, the total capital expenditure of Taiwan’s LED chipmakers is expected to further grow by 158% YoY to NTD 35 billion.

Utilization of LED backlight in LCD TVs has boosted the demand for LEDs, which has resulted in the shortage of LED supply. Nichia Vice President Noboru Tazaki and Epistar chairman Lee Biing-jye both publicly pointed out that the current short supply of LEDs will last till 2010.

According to survey by LEDinside, in 2010, Taiwan’s LED manufacturers will invest their capital mainly in buying MOCVD equipments for front-end production and expanding facilities. And the capital expenditure of LED packagers depends on whether each individual packagers expands their capacity according to the demand for LEDs from TV vendors.

The equipment providers are benefiting a lot from this trend of capacity expansion among LED manufacturers. Because the front-end process of LED is based on manufacturing methods including Vapor Phase Epitaxy (VPE), Liquid Phase Epitaxy (LPE) and Metal Organic Vapor Epitaxy (MOVPE or MOCVD), with the manufacturing equipment all outsourced from suppliers such as Aixtron, Veeco and Taiyo Nippon Sanso, the worldwide front-end LED chipmakers’ capacity expansion has caused the short supply of MOCVD equipment.

The mid-stream manufacturing process of LEDs consists of the following procedures: wafer expanding according to the requirements of LEDs, metal evaporation, photomask, mesa etching, thermal treatment, forming of electrodes on both ends of the LED, grinding, polishing, and cutting. Each MOCVD system is currently paired with 5 testing machines, with such machines provided mainly by Taiwan-based companies such as MPI and Chroma, and major providers of sorting machines include YTEC, MPI, etc.
 
During the back-end process, the die is attached to the lead frame and then packaged into specific shapes according to different applications. Sets of LED packaging and testing equipment are used in this process. The providers of such devices in Taiwan include Tripod Technology, Allring Tech , YTEC, etc.

Capital Expense of Taiwan LED chipmakers

Capital Expense of Taiwan LED packagers