The Taiwan-based LED chipmakers, Epistar Corp. and Formosa Epitaxy Inc., have both decided to expand their LED chip outputs to ease the supply deficiency caused by strong need for LEDs from major LCD TV manufacturers, according to Taiwan Economic News.

In recent months, Samsung and other LCD TV manufacturers have actively promoted LED-backlit models and hence thirsted for blue LED chips. At present, Samsung has booked large portions of Epistar and Formosa Epitaxy`s capacity to secure supply of the components, which has driven the two Taiwanese LED chipmakers to boost outputs.

Epistar says it plans to outsource some capacity as well as introduce MOCVD (metal organic chemical vapor deposition) to loosen its production lines, and will expand its in-house downstream production capacity, in an effort to boost its existing output of 1.1 million LED chips to 1.4 million units by the end of this year.

Formosa Epitaxy has invested a total of US$4.5 million in capacity expansion this year, after the plan to raise capitalization of its plant in Shandong, northern China by US$3 million recently. The firm will expand its laser engraving lines before setting up new epitaxial wafer production lines.

The LED-backlit LCD TV boom and increasing trade across the Taiwan Strait has fueled Taiwan’s LED industry, institutional investors noted. But they added that the business outlooks of the industry will heavily depend on popularity of Samsung’s LED-backlit LCD TVs in the second half of the year.