HighChem put out a display at the next generation lighting technology exposition Lighting Japan held at Tokyo Big Sight in January. At the seminar held on the 19th a speaker from the company gave an outline of the company and explained its LED business.

HighChem is a trading company which has been engaged in the import and export of electron chemistry products, as well as medical and agricultural intermediates. This business is handled at an office established in Tokyo in 1998 by members of the Chinese staff. There is currently staff which has now grown to 100, composed of 75 Chinese and 25 Japanese. One strong point is that all of the staff is fluent in Japanese. Since 2008 the electronics materials division has grown sharply, especially the business related to LED industry which has been growing rapidly in China. For specialty gas, they market such items as organic metal material, high purity ammonia, nitrogen trifluoride, and tungsten hexafluoride. With 7 business locations inside China, and a sales network, they are well informed about the Chinese electronics industry and this has supported their growth. Their business in 2011 reached 20 billion.

At the seminar, the company gave the following explanation of the situation.

“The Chinese manufacturing industry is controlled by government policy. Subsidies for the MOCVD began in 2009, and until they stopped in 2011, the LED business was growing at such a terrific speed that was made fun of as being the “LED game.” It came to the point where several hundred MOCVD units were being sold a year. In 2010 CNY30 billion was invested, but this jumped to CNY120 billion in 2011. With an annual growth 30% the government has estimated that it will become an industry valued at CNY500 billion in 2015. Besides the subsidies, the Chinese government will abolish sale of incandescent bulbs over 100W as of October of this year. This is being propelled along by the plan eventually to say fair well to incandescent lighting.

However, in the growth rate until the first half of 2011 during the latter half a slowdown started to be seen. A glance at the number of MOCVD units sold worldwide shows increases in that 220 were sold in 2009, 300 in 2010, and in 2011 that doubled to 600 units. It is anticipated that 650 units will be sold in 2012. China accounts for 46% but in terms of operation 50%. Under the present circumstances, the Chinese production capacity of the 2 inch substrate is 8 million, but 40 companies have plants under construction. Once all of these are finished, the production capacity will be 101 million a year. The global demand in 2011 came to only 45 million. The operational ratios of the plants had fallen to 40-50%, and there are some places which will shut down from the beginning of December until the spring. There have also been numerous cancellations of plants. MO (organic metals) have been in tight supply since the latter half of 2010, but with production increases on the part of companies right now MO has fallen into a surplus. For Chinese MO market, Nata accounts for 65% and AKZO for 15%. For high purity ammonia, in 2010 77% was imported from Korea and Taiwan, with 10% from Japan, making for practically total reliance on imports. Production in China came to 200 tons, just 10% of the demand. However, companies set up production plants in China, and in spite of the fact that the demand remained the same as last year for the next term production capacity came to 13,000 tons. A plunge in price is unavoidable.”

The scope of the market in China where several thousand companies has appeared during very short term because of the way Chinese government policy is handling things is extraordinary one. That so many people came to the lecture that there was standing room only for some people shows just how much concern there is for this market.