Reshuffling in the LED chip manufacturing industries in Taiwan and China through merger may happen faster than originally expected and larger makers will merge with smaller ones, leaving only two Taiwan-based makers and three China-based makers by 2015, according to chairman Lee Biing-jye of Epistar.
As continued improvement in technology keeps decreasing production costs, prices for LED chips are estimated to drop by 10% each year in the near future, Lee said. In addition, progressive development of LED chip technology is likely to reduce room for LED packaging and thereby lead to LED chipmakers merging with packaging houses, Lee pointed out.
Epistar has set aside funds for vertically combining LED packaging houses and/or downstream LED product makers through a stake investment over the next three years, Lee indicated.
Epistar suffered a net loss of NT$1.117 billion (US$38.5 million) in 2012 due to non-operating net losses of about NT$2.0 billion from stake investment in fellow maker Huga Optotech, Lee noted. However, Epistar expects 2013 business operation to turn profitable.
Epistar expects capital expenditure of NT$3.0 billion in 2013 and will set aside a larger budget for 2014, Lee said. Epistar plans to add 30 MOCVD sets in 2014, Lee indicated.