Business News | Feb 02, 2007

Arima Opto to aggressively expand LED chip capacity

Arima Optoelectronics plans to expand its LED chip capacity significantly in 2007 with a focus on AlGaInP (aluminum gallium indium phosphide) LED chips, ultra high-brightness (UHB) red/yellow MS LED chips and blue LED chips, according to company president PJ Wang.

The monthly capacity of UHB MS LED chips will more than double to 150 million units by the second quarter of 2007 at the earliest amid rising demand for traffic light and car rear lights as well as technology improvements, Wang said.

In addition, Arima Opto's AlGanInP LED chip capacity will be boosted nearly 70% to one billion units per month in 2007 amid stronger demand for the segment caused by replacement demand, sliding prices and improving brightness, Wang indicated.

For the blue LED chip segment, the maker is relatively conservative by estimating a 50% growth in monthly capacity to 300 million units in 2007 due mainly to technology constraints and patent deployment from international makers such as Nichia and Cree, Wang noted.

Hence, Arima Opto will mainly focus on working with Japan-based makers instead of aggressively expanding capacity for the segment, he added.

Boosted by the capacity expansions and rising demand from US-based car makers, Arima Opto's sales are likely to increase 50% in 2007, according to financial firms.

In related news, Wang said its lighting business is currently focusing on backlight units (BLUs) of less than 2.8 inches, with the segment generating around NT$200 million sales in 2006.

Arima Opto: LED chip capacity expansion plans, 2007 (m units) 

Type  Current  2007  Y/Y 
AlGaInP LED chip  600  1,000  66.7% 
Ultra high-brightness MS LED chip  30-40  150 (2Q 2007 the earliest time frame)  275-400% 
Blue LED chip  200  300  50% 

Source: Company, compiled by DigiTimes, January 2007

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