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MOCVD shipments to rise due to strong LED demand

Posted: 10 Feb 2011 ?? ?Print Version ?Bookmark and Share

Keywords:metal organic vapor deposition? MOCVD? LED demand?

The metal organic vapor deposition (MOCVD) equipment market is expected to ship 900 tools in 2011, according to Barclays Capital. The investment banking firm has raised its forecast from its previous estimate of 800 tools.

The total MOCVD tool market was close to 800 unit shipments in 2010, quadrupling 2009 shipments, said C.J. Muse, an analyst from Barclays Capital, in a report.

The new forecast follows an ongoing surge in LED demand. MOCVD is one of the critical tools used in LED production. Aixtron, Nippon Sanso and Veeco are battling each other for share in the MOCVD arena.

Aixtron and Veeco ''appear to be closely splitting the China market. Nippon Sanso remains the dominant supplier in Japan,'' Muse said. ''Korea is split by vendor, with Samsung primarily an Aixtron account, and LG and Seoul Semi primarily Veeco accounts. Aixtron remains the dominant supplier in Taiwan, though Veeco continues to make headway into the key accounts.''

In total, ''we see the geographic mix and vendor market share driving Aixtron's market share to (about) 54 percent in 2011, relatively flat year-over-year, and Veeco's market share to (about) 44 percent, up (about) 1 percent versus 2010,'' he said. ''From a tool perspective, this suggests (about) 484 tool shipments for Aixtron and (about) 395 for Veeco.''

The MOCVD market is not cooling down, as some had thought. ''Although sentiment on the LED equipment vendors has been fairly negative over the last few months, driven by concerns about China subsidies coming to a halt, our work suggests that this is not the case,'' he said.

Back in October, ''we suggested that China MOCVD demand was likely to grow substantially from (about) 270 tools in 2010 to (about) 450 to 500 in 2011. This drove our overall MOCVD market estimate of (about) 800 tools in 2011,'' he said.

''However, having compiled a bottoms-up analysis of the MOCVD market, our estimates now point to China 2011 demand of (about) 575 tools. And assuming MOCVD demand in the rest of the world declines by (about) 39 percent year-over-year in 2011 to (about) 325 tools, we now estimate that the total MOCVD market is likely to reach (about) 900 tools,'' he said.

''And importantly, industry checks suggest potential for an additional 200+ tools out of China, assuming current market dynamics hold and there is no sudden and widespread reversals in subsidy programs,'' he said. ''In fact, checks suggest that the biggest swing factor to 2011 China MOCVD demand is likely to be the speed with which the major China players are able to install and ramp tools, rather than a sudden halt in subsidies.''

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