South Korea's LED supply chain relies on Japan's Kyocera and Namiki for sapphire substrates, and Nichia and Toyoda Gosei for epitaxial wafers, chip packaging and LED phosphor materials.
Among the Japan-based companies, Namiki was hit the hardest by the recent earthquake offshore of Japan. Nichia and Toyoda Gosei were relatively unscathed.
In sapphire substrates, South Korea's Sapphire Technology Company (STC) and Astek already have ingot production and slicing capability. Iljin Display and Hansol Technics (formerly Hansol LCD) also have ingot slicing operations. With Hansol Technics and LG Siltron expanding to upstream sapphire substrates since 2010, South Korea has become less reliant on overseas supply sources. Hence Namiki's production disruption should have little impact on South Korea's LED industry.
Additionally, as STC now has the world's largest capacity for LED-use sapphire substrates, Namiki's share of the South Korea LED market has been down for quite some time.
As for MOCVD equipment, South Korea LED chipmakers mainly rely on Germany's Aixtron and US-based Veeco, and hence, the earthquake has not affected equipment supply to the country. From epitaxial wafers to chip packaging, South Korea has sufficient capacity within the country, plus Nichia and Toyoda Gosei sustained only minor damages.
However, South Korea still needs to improve its own capacity in phosphor material production. Though, as mentioned, Nichia and Toyoda did not sustain serious damages, shipments from Japan to South Korea could be impacted by air and sea traffic delays.
| Overseas and domestic suppliers of South Korea LED supply chain | ||
|
| South Korea | Overseas |
| MOCVD equipment | AP System, Top Engineering, Juseng Engineering | Aixtron, Veeco |
| Phosphor materials | Force4, Daejoo Electronic Materials | Nichia, Toyoda Gosei, Osram |
| Sapphire substrates | STC, Astek, Iljin Display, Hansol Technics | Rubicon, Monocrystal, Kyocera, Namiki |
| Epitaxial wafers | Samsung LED, LG Innotek, Seoul Optodevice, EpiValley | Nichia, Toyoda Gosei, Cree, Osram, Philips Lumileds, Epistar |
| LED chip | Samsung LED, LG Innotek, Seoul Optodevice, EpiValley | Nichia, Toyoda Gosei, Cree, Osram, Philips Lumileds, Epistar |
| Chip packaging | Samsung LED, LG Innotek, Seoul Semiconductor, Alti-Electronics | Nichia, Toyoda Gosei, Cree, Osram, Philips Lumileds |
Source: Companies, compiled by Digitimes, March 2011