Weak demand and overcapacity will continue to hit China's LED industry, with oversupply in the upstream chip sector likely to last till 2020, following a year of slow growth in 2018, according to according to China Solid State Lighting Alliance (CSA).

China-based makers' combined LED production value in 2018 is estimated at CNY737.4 billion (US$111.6 billion), increasing 12.8% on year, much lower than the 25.3% increase recorded in 2017, CSA said.

China-based LED wafer and chip makers had 1,908 MOCVD sets as of the end of 2018, growing 12.6% on year, and the corresponding total production capacity is 12 million wafers a month, CSA noted.

For the chip segment alone, the 2018 production value is estimated at CNY24 billion, rising 3.3% on year. The chip value growth was lower than the overall increase for China's LED industry due to chip price declines, CSA indicated.

The oversupply of LED chips has prompted some China-based makers, mostly second-tier ones, to delay the start of using MOCVD tools they had acquired in 2018 or earlier, CSA said. These new tools would add total monthly capacity of about two million wafers, CSA noted.

However, Sanan Optoelectronics, the largest China-based maker, has expanded monthly production capacity to three million LED wafers and will further increase it by 40% in 2019-2020.

By: DocMemory
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