According to a report in Taiwan Economic News, Frank Chien, chairman of Taiwanese LED maker Formosa Epitaxy predicted that the rise of table PCs may drive shortage of high-end LED chips starting February 2011 at the earliest.

Chien confirms that Formosa Epitaxy started delivering LEDs for tablet PCs in October.

Chien said that Apple’s hot-selling iPad used LEDs made by Japan’s Nichia Corp and Toyoda Gosei, while other global tablet PCs vendors scheduled to launch their products which use Taiwan-made LEDs from early 2011.

He also supplemented that shortages of LED chips, especially higher-end models, are very likely to loom then and linger throughout the year.

Affected by the possible LED shortage, LG Display has taken action to secure their sources of supply. It has cooperated with Formosa Epitaxy and Amtran Technology to build the LED-making joint venture Jiangsu Canyang Corp in China.
 
Amtran is concerned about LED shortages in 2011, and has stated that, with selling prices falling, LED-backlit LCD TVs will replace traditional CCFL TVs more quickly in the coming years and therefore use a large part of the limited supply of LEDs in the future. This means that demand for LEDs will surge, along with more LED-backlit devices being put on product shelves worldwide.

For Formosa Epitaxy, it plans to add 15–20 MOCVD reactors for its Taiwan factory, and 25 for the LG Display–Amtran– Forepi joint venture.
 
At present, 60% of Formosa Epitaxy’s LED output is used in TVs, 15% each to tablets and LED lighting, and 10% to projectors and other devices.

The company targets to increase its capital equipment budget to NT$4–5bn (about US$150m) in 2011, targeting annual revenue of NT$7bn, or US$234m (up more than 50% on 2010’s NT$4.5bn, or US$150m).