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The largest China-based LED epitaxial wafer and chip maker Sanan Optoelectronics has lowered quotes for LED chips, especially by 20% for 2835 models used in lighting products, with HC SemiTek, the second largest China-based fellow maker, also cutting prices, according to industry sources.
The price reductions are meant to force smaller competitors out of the market, the sources explained, adding Epistar, the largest Taiwan-based competitor, has not followed suit and instead has declined orders coming with low quotes.
However, the latest price cuts have yet to push up demand for LED chips, as clients are probably still waiting for further reductions, the sources said, adding LED prices are likely to drop further in first-quarter 2018.
Despite the price cuts, Sanan will capitalize on the China government’s subsidization for equipment used to produce III-V compound semiconductors in a bid to to set up a production base in Quanzhou, southeastern China, with investment totaling CNY33.3 billion (US$5.03 billion). The production base will produce GaN substrates, epitaxial wafers and chips, GaAs epitaxial wafers and chips as well as high-power GaN laser diodes, with all of production to begin in five years.
For LED epitaxial wafers and chips, Sanan has nearly 400 MOCVD sets currently and will expand the capacity to 450 in early 2018.
HC SemiTek and Huaian Aucksun Optoelectronics Technology are also adding MOCVD sets and Xiamen Changelight and Shenzhen MTC Optronics will also do so, the sources said.
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