In the Metal Organic Chemical Vapor Deposition (MOCVD) market, international players like Aixtron from Germany and Veeco from the United States have long dominated. In 2016, domestic MOCVD equipment held only an 11% share of the Chinese market. However, in recent years, there has been a strong push for localization, and domestic MOCVD systems have started gaining traction. They have been validated by leading LED chip manufacturers in China, gradually pushing out foreign competitors. For instance, Aixtron’s products have largely exited the Chinese market, leaving only Veeco as a major competitor in key applications such as blue, green, and white LED production.
Zhongwei Semiconductor recently announced that it has delivered over 100 units of its Prismo A7â„¢ micro-MOCVD reaction chambers since the product's market launch. This milestone signals growing confidence in the development of domestic MOCVD technology. However, challenges remain. On November 2, 2017, a U.S. federal court issued a pre-judgment order against SGL, a supplier of graphite trays used in micro-devices, halting all related production and shipments. This ruling poses a significant risk to existing customers using micro-device technology, highlighting the ongoing patent-related hurdles for Chinese manufacturers.
In response to Zhongwei’s progress and the patent risks, Gaogong LED reached out for more details on their technology, output, and future plans. The company, however, declined to provide specific information at this time.
Looking ahead, the rapid growth of China’s LED industry presents a great opportunity for domestic MOCVD manufacturers. Dr. Chen Aihua, Chairman of Zhonghao Optoelectronic Equipment (Shanghai) Co., Ltd., emphasized that domestically developed equipment with independent innovation has real potential. He noted that while foreign equipment still dominates, domestic manufacturers can compete fairly by leveraging cost-performance, quality service, and continuous improvements.
Zhonghao is the only Chinese company that has successfully commercialized MOCVD equipment. Its machines are now being used in major chip factories such as Sanan Optoelectronics, Huacan Optoelectronics, Yuanrong Optoelectronics, Jucan Optoelectronics, Hualei, Hefei Rainbow Blue, and Energy. Since its first shipment in 2012, Zhonghao has delivered nearly 30 units of MOCVD equipment, marking a significant step forward.
Breaking the patent barriers in MOCVD is no easy task. The industry is highly patent-intensive, with core technologies largely controlled by foreign companies like Veeco and Aixtron. These firms have strong global IP portfolios and invest heavily in R&D and protection. For domestic manufacturers, building independent core technologies requires substantial investment and time—challenges that have kept many companies working for over a decade.
While imitation may offer short-term convenience, it also brings long-term patent risks. To truly become a leader in the LED industry, China must focus on independent innovation, develop core technologies, and build a robust intellectual property system.
Building core technological capabilities is a gradual process that demands significant resources and sacrifices. As Dr. Chen Aihua explained, Zhonghao initially focused on two principles: establishing independent core technology and ensuring that innovations meet customer needs. Despite early challenges, such as shorter maintenance cycles and lower process stability compared to Veeco’s equipment, the company continued to improve its products.
By 2016, Zhonghao launched its second-generation ProMaxy®168 MOCVD equipment, which matched Veeco’s performance but faced issues with process introduction. The company worked closely with customers to streamline the integration process, ultimately achieving mass production within just three months.
Independent innovation comes at a high cost, including heavy investments in R&D, suppliers, and key components. These expenses have led to financial pressure and missed sales opportunities. However, Dr. Chen believes these costs will eventually pay off as the market recognizes the value of domestic solutions.
Customer support has been crucial to the success of Zhonghao’s innovation. Without customer collaboration, there would be no real-world testing or industrial application of their technology. Dr. Chen expressed deep gratitude to their partners for their trust and contributions.
Looking ahead, the future for domestic MOCVD manufacturers is promising. With China’s LED industry expected to grow rapidly, there is ample room for both domestic and foreign equipment to coexist in a fair and competitive environment. Over seven years of development and two generations of products have given Zhonghao a strong market position. Strategic partnerships and industrial cooperation are also helping to strengthen its overall capabilities.
As MOCVD localization increases, the cost of equipment is becoming more favorable for Chinese chip manufacturers. This shift could weaken the competitive advantage of foreign producers and enhance the global standing of China’s LED industry. If domestic equipment continues to improve in cost-effectiveness and performance, it could further capture market share.
Ultimately, with the foundation of independent innovation, Chinese MOCVD manufacturers are well-positioned to meet evolving customer needs, improve existing systems, and introduce next-generation products that reshape the competitive landscape. This will play a vital role in supporting the continued growth of China’s LED industry.
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