CHINA: Green light for expanding diode production

IC Insights forecasts the worldwide discrete semiconductor CAGR at 6 percent from 2006 to 2011, with revenue of $22 billion in 2011. China’s discrete semiconductor market is growing much faster than the rest of the world due to its ever-increasing local demand as well as export. A significant factor of the discrete semiconductor growth is brought about by the increasing demand for diodes. China’s overall diode shipment in 2006 was 150 billion units (data from China Semiconductor Industry Association).



To further expand market share, diode manufacturers in China are beefing up their R&D and manufacturing capabilities. Four trends can be seen in China’s diode industry. Firstly, some of the top vendors are expanding their fabs by partnering with either international manufacturers or domestic players. Secondly, since competition is becoming more intensive, many diode suppliers are lowering their average selling prices (ASP). Thirdly, some top vendors are moving their focus to high-end products where they can harvest higher margins than the commodity types. Finally, the fourth trend being seen in the diode market is that almost all vendors, whether MNCs or domestic players, are producing products compatible to both the EU RoHS and China’s own environmental directive.

COMPETE IN SMT

Electronic products are shrinking in size and the demand for compact diodes is increasingly high. Traditionally Chinese vendors mainly target the standard and low-end diode market. Now with augmented manufacturing facilities, some top suppliers can compete in smaller-sized and SMT diodes. China suppliers are offering a broad range of diodes in SMA, SMB, SMC, MELF, mini-MELF, and SOD packages. Applications like lightings in automotives are paving the way for rectifying, high-current, and ESD protection diodes.



Leshan Radio Ltd is one of the largest diode suppliers in China. It designs and manufactures low-profile and SMT-capable SOT-23, SOT-723, SOD-323, SC-59, SC-88, SC-88A, and SC-89 products with annual output of 28 billion units. The company’s product development is focused on high-integration and minimization – features that are required by market segments such as home appliances, automotives, communications, computers and personal electronics.



To further increase its competence in the marketplace, Leshan Radio set up a new R&D center and adopted the 6-sigma quality control system to guarantee all products it produced meet the strict quality requirements.



Galaxy Semiconductor Holdings Ltd (Galaxy Semiconductor) is another diode manufacturer operating in China, and is one of the largest suppliers of rectifying diodes. It now owns 12 fabs; 10 of them are diode fabs and the other two are wafer fabs for diode products. In 2006, Galaxy Semiconductor manufactured 570 million diodes, up 27 percent from 2005. Last year the company also established an independent facility that focuses on SMT diodes. The new SMT diode facility is expected to increase the company’s annual SMT component output to 360 million units.

“In addition, a wholly owned subsidiary of the company, Sun Light Planet Ltd, had acquired Seven Rainbows Ltd, which in turn holds 100% equity interest of Galaxy Hi-New,” said Yang Senmao, Chairman of Galaxy Semiconductor Holdings Ltd. “Our future plans include an increase in production of micro-components, as the gross profit for this is higher than for other diodes. Another plan is to boost production and sales of our plastic packaged diodes.”