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Dec 7th, 2011
Digitimes Research: Despite low demand, Nichia invests US$898 million in LED equipment in 2011
In 2010, Japan-based LED firm Nichia had the largest share of the global sales of white light LED products.
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Its market share far exceeded second- and third-place, Samsung and Seoul Semiconductor. However, compared with the market share in 2009, Nichia's share in 2010 actually decreased due to the rise of the LED industry in South Korea. The market share of South Korea-based firms increased in 2010.

Despite the increasing market share of South Korea-based LED firms, the capacity utilization of the firms in 2011 has been low, leading the firms to lower revenue expectations. Nichia's revenues in first half of 2011 showed slight increase compared to the second half of 2010 despite the March earthquake. Nichia estimates that revenues in the second half of 2011 should be higher than first half as Japan's economy recovers from the earthquake. This means Nichia's revenues will show a bullish trend despite the low demand in the market.

Nichia's revenues in Asia have been growing rapidly as the company actively expands in China. Customers in China also have been adopting Nichia's LED chips to produce street and tunnel lamps, helping to increase Nichia's revenues in Asia.

Nichia is optimistic about the growth of the LED market and has been constructing new plants and installing new equipment in 2009-2012. The 2011 capex will reach JPY70 billion (US$898 million), the second highest capex in the period from 2008-2010. In addition to adding new equipment, Nichia also plans to recruit 500 new employees in 2012.

Nichia has been improving technologies by shifting focus from low-power LED chips for backlight products to high-power chips for lightings. Nichia also aims to increase lighting efficiency of 1W white light LED products to 133lm/W in 2011 and 180lm/W in 2015.

The largest producer of LED in the world, Nichia started out as a chemical plant that produced phosphor. Nichia successfully developed high-brightness blue light LED phosphor in 1993 and became a world-renowned LED firm.

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