In china, LED chip makers recently planed to pay for MOCVD equipment about 1,400-1,600 sets, which attract many people in the industry concerned.

From the LED supply chain, the upstream companies can got about 70% of profits, and LED chip packaging accounts for about 30%.Most china’s LED industry is in the chip packaging segment, so they wanted to develop epitaxial and LED chip production, and china government also supported that.
Now, it is reported that the government subsidizes 8-10 million Yuan (US$1.19-1.49 million) of each MOCVD machine installation, and has attracted many LED chip makers from home, Taiwan and the US to set up facilities in china.

As a result, Sanan Optoelectronics invested 12 billion yuan to expand upstream and planed to procure around 100 MOCVD sets. Tsinghua Tongfang had planed to invest3 billion yuan in LED chip production and to become China's largest and a world top-three supplier. Silan Microelectronics would raise 600 million yuan for expanding high-brightness LED chips producing.

Some people in the industry noted that this blindly expand production will bring lots of problems, such as prices lower, disorderly competition, product quality down to standard and so on.

China's Ministry of Industry and Information Technology (MIIT) also said, china government are being making its twelfth five-year plan for LED industry development to solve these difficulties.