After its average selling price (ASP) dropped by 25% in 2016, Phecda Technology, specializing in LED patterned sapphire substrates (PSS) manufacturing, could possibly experience a turnaround this year. On one hand, in terms of revenue, Phecda Technology topped in the industry with the amount of NTD 530 million, rising from NTD 340 million in 2015. On the other, it ended the disappointing profit slump at the end of 1H16 and slowly recuperated in 2H16. The Tier 1 giant’s financial results reflected how down the market was in 2016, according to several juridical persons.
LED lighting continued to grow and reached a market share of nearly 70% in 2016, according to Kuang Kuang-Ning, General Manager at Phecda Technology. However, epiwafer manufacturers, or even the whole supply chain, did not seem to get a taste of success due to the fact that an avalanche was triggered in the price of LED. Yet, after a storm comes a calm, the market is recovering -both the price and quantity rise- and it saw a rare short PSS supply, leading to a more upbeat market sentiment and a subsequent capacity expansion among Chinese epiwafer manufacturers.
The 2016 revenue of Phecda Technology was mostly from its Zhubei plant, of which the capacity has boosted to 250k/M (2-inch PSS) since 2015 and the yield rate went over 90%, approximately 20% above the average. These advantages on technology and capacity make Phecda Technology one of the most crucial partners for LED epiwafer makers at both sides of the Taiwan Strait. Kuang said, currently, orders from the top two Taiwanese LED chip giants Epistar and OptoTech have consumed most of the capacity; meanwhile, Chinese chip manufacturers San’ an, HC SemiTek, and Elec-Tech International also finished the quality test of Phecda Technology’s substrate samples. Those signs, with a healthier market dynamic and the plan to start the mass production in the plant in Nanchang in 3Q17, suggest a high chance for Phecda Technology to double its annual revenue in 2017.
2017 looks like a promising year for Phecda Technology. The company is very likely to hit another peak with the start of Nanchang plant production and the implementation of brand new strategies. In retrospect, the incredibly fast growth of this substrate supplier, founded in 2012, impressed the industry. As a LED PSS manufacturer with the shortest history and least experience in Taiwan; however, Phecda Technology started making profit a year right after its establishment and entered the emerging stock market at the end of 2014, currently even ranking top in the supply chain. To embrace the 5th anniversary, Phecda Technology starts the second five-year plan to invest in the development of Micro LED PSS. Starting from 2017, within the next five years, Phecda Technology sounds ready for a new pinnacle.
Image: Kuang Kuang-Ning, General Manager at Phecda Technology (Phecda Technology )