China to Produce 54% of World's LED Chips This Year After Ramping Up Capacity
Dou Shicong
/SOURCE : Yicai
China to Produce 54% of World's LED Chips This Year After Ramping Up Capacity

(Yicai Global) Oct. 24 -- China's chipmakers will produce 54 percent of the world's LED chips this year after a significant increase in capacity, according to a new industry report.

Domestic companies, including key chipmakers Sanan Optoelectronics Co. [SHA:600703] and HC SemiTek Corp. [SHE:300323], have been increasing capacity since last year to meet rising demand for LED chips, China Securities reported yesterday.

China's LED package companies are mainly located in the southern economic powerhouse of Guangdong province and in the Pearl River Delta region. The firms have been looking to relocate operations to second-tier cities due to rising labor and land costs in recent years. Local governments have also rolled out preferential policies to attract such firms.

Chinese LED firms are speeding up capacity expansions and pushing up the already large margins of global peers. Larger global LED companies are scaling down operations, leading to greater expansion among Chinese companies, the report said.

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Keywords: MSCI , Guangdong , Sanan Optoelectronics , HC Semitek Corp