Cree set to double LED chip output

Slides
Photos

By Chen Hong (China Daily)
Updated: 2009-11-10 10:29

Cree Inc, a market leader in light emitting diode (LED) lighting, will double its chip production capacity next year to meet strong worldwide growth, a top company executive said.

The NASDAQ-listed US company signed an agreement with the local government of Huizhou, Guangdong province, yesterday to build the world's largest manufacturing plant, with a floor area of 55,000 sq m, for LED chips. It is projected to start operating from July next year.

"This investment enables us to expand our presence in China and demonstrates our commitment to serving the growing demands of both our local and global LED customers," said Chuck Swoboda, Cree chairman and CEO.

The company would further expand production capacity depending on market performance, he said.

China is already the largest market for Cree, with a controlling share of 38 percent. The company will continue to invest heavily in China, Swoboda said, adding that the company's total invesment of $165 million in the 2009-10 fiscal year will mainly go to the US and China.

Cree's move comes shortly on the heels of a national plan to accelerate the development of the energy-saving semi-conducting lighting industry, including LED and OLED (Organic Light Emitting Diode).

Outlined by the National Development and Reform Commission, the country's top economic planning body, the plan seeks to increase the industry's output by 30 percent annually from 2009 to 2015. More than 70 percent of the landscape and decoration lighting sector is expected to use LED or OLED products by 2015.

"It's a great opportunity for the Chinese LED industry, which is well developed in the low-end application market but is still weak in the high-end processes like chip development," said Tang Guoqing, a founding member of China Association of Lighting Industry.

Cree's investment would bring the best technology to China and can encourage the entry of other leading LED chip makers, including Japan's Nichia, Germany's Osram and Netherland's Philips, Tang said.

China's semiconductor lighting industry was worth nearly 70 billion yuan($10.29 billion) last year, of which chip production was valued at just 1.9 billion yuan, or less than 3 percent, but the application market generated 45 billion yuan.

The global financial crisis has failed to cool the fast-growing industry, with annual growth surpassing 50 percent year-on-year since 2007 and touching 53.3 percent in 2008. Around half of the 2,000 LED production and research entities across the country are located in the Pearl River Delta area.

(For more biz stories, please visit Industries)