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the fate of conventional lighting manufacturers

The president of Neo Neon stresses that their strategy is always minimize production costs to quickly gain market share. Investing in fully-integrated LED manufacturing enables them to escape the fate of conventional lighting manufacturers, who are relegated to do exclusively assembly for their operations are dictated by key-component suppliers.Randy Cheng, general manager of Neo-Neon’s Taiwan branch, says the investment has enabled them to cut costs of LED lights faster than projected. Cheng touts that the group’s LED production is much more cost-competitive than rivals’ for streamlined production. The chips will be installed in both indoor and outdoor lighting turned out by Neo Neon.

The Taiwanese-founded company is headquartered in Guangdong Province of mainland China, where its factory is built on 300 acres and outfitted with five German-made, high-performance metal organic chemical vapor deposition (MOCVD) chambers to turn out 12,500 wafers with some 400 million chips initially, meeting about 70% of the demand from its LED-emitter production line. Fan says that the wafer factory’s chips will be used to make various lamps according to qualitative levels, with top-grade chips going into high-power lighting and outdoor signage, mid-range chips for other applications, and low-end chips into decorative lamps.

The company’s LED-lighting sales in 2007 and 2008 have contributed around 50% and 60% of its overall revenues, estimating such sales to further grow 20% this year. Part of such growth is expected to come from contracts, for which the company is vying, from four cities in Guangdong Province, whose total value of some 1.2 billion Chinese yuan is earmarked for LED streetlights.

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