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DTF Taiwan LED Supply Chain Technology Forum: The advantage of Taiwan's complete supply chain for LED lighting industry

DIGITIMES staff, Taipei

Taiwan's LED production volume ranks number one in the world and the output value comes in second. But lighting makers have had nothing to rely on when developing their LED products because of a lack of common standards at the moment. It will take efforts from the industrial, governmental and academic sectors to work together to establish the standards. According to Taiwan Lighting Fixture Export Association Chairman David Chang, Taiwan used to be the "kingdom of lighting," and had a complete supply chain. Similarly, the LED industry in Taiwan today has a complete supply chain as well, offering an opportunity to reinvent the lighting industry's golden age.

Chang, talking about the early development of Taiwan's lighting industry, noted that Taiwan became the "kingdom of lighting" 30 years ago, and the Taiwan Lighting Fixture Export Association was established 21 years ago. The lighting devices at that time were mostly OEM/ODM products for export. There was a complete supply chain formed by upstream, midstream and downstream suppliers, and most of them were small to medium businesses. It was the kind of family business that was usually passed on from one generation to the next. Those companies were very good at cost analysis and hard working, and they had very strong sales from exports mainly to America and Europe.

About 11 years ago, the labor structure in Taiwan underwent a major transformation. Labor and land costs both increased. Competition from China-made low-price products forced Taiwan's lighting makers to move their production to China, mostly in Guangdong province. Since then, the lighting industry in Taiwan has become stagnant.

In recent years, LED technology has seen some major progress, and new technology has been introduced to the lighting sector. Moreover, optoelectronics players are diversifying into the lighting industry. With help from optoelectronics players, the lighting industry is regaining its strength. But how lighting and optoelectronics players from two different industries can form a synergy is something that needs to be contemplated on.

Energy conservation and carbon reduction are international global trends and the global goal is to cut carbon emissions by 48 billion tons by 2050. Lighting is a key factor affecting the environment. For example, lighting generated 19 million tons of carbon emissions globally in 2005, which is equivalent to 70% of the worldwide carbon emissions by small cars.

Now incandescent bulbs are being banned gradually worldwide. Finding ways to reduce lighting's impacts on the environment will be an important issue in the future. The areas we can work on include light sources, lighting devices and control systems - all of which should have their efficiency improved.

Taiwan is still the leading supplier of LED products in terms of volume and second in terms of value (but the Korean government and companies have been investing heavily in the sector, fast and strong growth can be expected). LED lighting is a very promising industry, and because of improvements in luminous efficiency, LED's luminous efficiency has surpassed all traditional lighting sources in 2010. The age of LED lighting has arrived.

However, the development in LED lighting still faces some issues. The LED is a point-source light with low beam and high luminance and without a universal standard. Although LED lighting products are developing quickly, their functions are immature and costs are still high. But general lighting requires comfort, reliability, standardization, better illumination and uniformity, and low costs.

Taiwan's LED lighting industry has a complete supply chain, which includes upstream suppliers of LED wafers and chips, midstream suppliers of packaging services, and downstream makers of lighting modules and designers of lighting devices. This is a great advantage.

For the future of the LED lighting industry, Taiwan players should promote cooperation with their counterparts from China (but Taiwan's independent operations must be maintained). In practice, Taiwan should establish standards for LED lighting, expand government subsidies, organize regular forums for the lighting industry, and interact with international peers. But with no standards or guidelines for the makers, it is therefore necessary for the industrial, governmental and academic sectors to work closely together. And the lighting and the optoelectronics industries have to form a synergy.

David Chang, chairman of Taiwan Lighting Fixture Export Association

David Chang, chairman of Taiwan Lighting Fixture Export Association
Photo: Digitimes, October 2010

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