The number of LED chips used in LED TVs has been decreasing. Industry sources believe LED TVs will only require 10-12 units of high-power LED chips in the future. Hence global demand of MOCVD equipment will likely decrease from 5,000 to 2,500.

The LED industry has been experiencing oversupply. In 2010, China set up 245 units of MOCVD equipment. In the following year, China added 420 more units of MOCVD equipment and became the area with the most MOCVD equipment in the world.

According to studies, the supply of LED chips in 2011 reached 174 billion units, but demand was only 129 billion. Supply surpassed demand by 35%. This caused many LED firms to incur losses in second-half 2011.

Industry sources noted that by the output of the LED backlight market, 1,200 units of MOCVD equipment would be enough. However, currently there are more than 1,500 units of MOCVD equipment that supply the demand for LED backlights.

LED TV firms have been promoting direct-lit LED TVs. This type of model narrows the price gap with CCFL-backlit TVs. However, direct-lit LED TVs use fewer LED chips than side-lit LED TVs.

Industry sources noted that the anticipated growth of MOCVD equipment in 2012 will be slow or zero. Nevertheless, China has set a goal to increase the percentage of self-made MOCVD equipment in the 12th Five-Year Plan. This means the global number of MOCVD equipment will likely grow.

Source:digitimes