Lextar Electronics will adopt MOCVD machines for 6-inch epitaxial wafers at the end of 2010, becoming the first LED chipmaker in Taiwan with such equipment, according to the company. Meanwhile, Lextar is also expected to ramp up 4-inch MOCVD equipment to 50-60 sets by year's end.

Lextar is aggressively expanding its production capability with monthly capacity in September expected to reach 90,000 LED wafers and 750 million LED chips, and further to 130,000 wafers and 850 million chips at the end of 2010. For LED chip packaging, the company's capacity is on pace to reach 750 million chips in September and up to 850 million chips at the end of the year, slightly lower than the projected one billion. Capex for the year will rise from the previously planned NT$8 billion (250.28 million) to NT$10 billion.

Currently many Taiwan LED chipmakers are still manufacturing via 2-inch MOCVD sets, while competitors in Japan, South Korea and Europe have already begun production using 6-inch equipment, Lextar indicated. With the LED industry expected to grow at a ferocious pace in the coming years, and TV and monitor backlight applications moving to larger and higher power LED chips, Taiwan's LED chipmakers could fall behind in manufacturing capability.

Lextar predicts LED backlight technology could account for 50% of both the LCD TV and LCD monitor markets in 2011 despite recent reports that some TV vendors have lowered shipment targets.