At the end of 2011, the number of MOCVD equipment will increase to 2,500 units. The output capacity of blue LED chips will double.

In the past, red-yellow-light LED epitaxy and crystal grains were all based on germanium substrate technology, and the main application market was mainly lighting market. Now with the maturity of sapphire substrate type LED technology, plus it becomes the mainstream of LED backlight. Therefore, with the increasing demand for large-size panel backlight applications, manufacturers began to cut into the sapphire-based blue-green LED epitaxial wafer market in 2010.

In fact, due to the short supply of upstream sapphire substrates and organic metal (MO) gases, blue LED epitaxy/crystal grains are expected to remain tight until the end of 2010. In order to meet the market demand for blue LED epitaxy/grain, DisplayBank expects that the number of MOCVD equipment installed worldwide to produce blue LEDs will increase to 2,000 units in the first quarter of 2011. By the end of 2011, it will continue to climb to nearly 2,500 units.

In April 2008, the number of installed MOCVD equipment in the world was only over 500 units. By the end of June 2009, this number has reached about 1,000 units. If we can approach 2,500 units by the end of 2011, we can see that MOCVD equipment has grown rapidly.

DisplayBank gives an example of this situation. South Korea's Seoul Optodevice by the number of less than 20 sets of MOCVD equipment in 2009, will significantly increase the number of installations in 2011 to about 80 units. In fact, not only South Korean manufacturers, many LED epitaxial/grain manufacturers in Taiwan are also greatly expanding the number of MOCVD equipment.

Displaybank further pointed out that Samsung Electronics and LG Electronics have invested heavily in the development of LED front-end and back-end technologies to achieve the effect of cost reduction through so-called vertically integrated LED manufacturers. Taiwan’s two major LCD panel makers, Chi Mei and AUO, are actually moving toward vertical integration. This trend will allow blue LED-related devices and semiconductor manufacturers to speed up production in the coming years to meet market demand.

However, there are market experts still worried about such a rapid expansion. After all, too rapid expansion of production capacity may trigger a rapid decline in prices, but hurt the industry itself. This has already been learned in the DRAM and NAND flash memory industry!