Due to the major aggressive expansion plans of some Chinese LED companies, it is estimated that 220 gallium nitride (GaN) reactors will be installed in 2015. This new capacity expansion is a little different from what happened several years ago, when lots of LED companies in China purchased government-subsidized tools.
It is estimated that only large and publicly traded companies will purchase metalorganic vapour (MOCVD) phase epitaxy tools in 2015. Of the largest 20 MOCVD customers by the end of 2014, 8 were Chinese companies and 3 of those companies have all announced expansion plans for 2015. The large number of MOCVD tool shipments will result in a 28% increase in the level of excess supply in the LED market.
Most of the new reactors purchased in 2015 will be new generation tools, providing double capacity per reactor. The largest 3 Chinese companies will achieve a combined market share of 27% in 2015.