business interview
rhombus4
A
There are several local competitors in Japan, and
there is also one Chinese competitor. Japan is a
large market for LED production, and laser production is
also very significant there. So they have, to an extent, a
local supply of MO sources from their own companies.
We compete with these companies on a local basis. The
way that we do this is to leverage our strengths from the
manufacturing technologies that we have, and the scale of
our operations.
Q
Metal-organic suppliers are sandwiched
between chipmakers demanding steadily falling
prices, and a fluctuating materials market. How do
you cope?
A
We are, in a way, squeezed between what our raw
material suppliers demand and what our chipmakers
can afford, and the chip market is highly competitive with
prices falling. However, as a chemical producer we have
to strive for having a financial return that enables us to
keep investing in the product line and keep extending our
large bubbler fleet, so that we can support the future
growth of customers and the industry. We need a certain
return to keep our business viable.
Of course, the market demands high-quality, reliable
products at competitive pricing to support growth in the
LED industry. So what we’ve been doing over the past
few years – and are still doing – is trying as aggressively
as possible to control all our costs. But at some point you
Q
Are sales to LED chipmakers a big part of your reach an asymptote, where not much can be squeezed
business? out of the system any more. So the bottom line is that if
our raw material costs increase - and the raw material
A
Yes, LEDs are by far the biggest market globally for costs are not an insignificant part of our total costs - then
any player in this industry. The other important that needs to be reflected in the pricing of our products.
markets for AkzoNobel are III-V solar cells, certain laser This is not always easy, of course.
technologies, and a broader customer base of various
device types.
Q
Some researchers have written papers that
claim that the reserves of some metals, such as
Q
Do you expect the company’s metalorganics gallium and indium, will be depleted within a few
business to continue to thrive? years. What’s your view on this?
A
I’m pretty excited about the outlook for the next few
years. Strong demand in the backlit LED sector will A
We are not as worried as the authors of the papers.
We have looked at this at a corporate level, where
continue. When the technology eventually reaches we monitor all the key raw materials, and in the MO
maturity and the market reaches saturation level, demand business, we approach this by working as closely as
might level off again, but that is at least several years possible with our suppliers.
away because these technologies are still new. Products
for netbook and laptop PCs are where the penetration is In the overall consumption of gallium and indium, the
greatest, but these portable devices have a lot of potential production of MO sources is a very small segment. This
for further growth. LED TVs are just beginning, and by doesn’t say anything about future capacity, but we are an
the time the backlit sector has matured, the general almost insignificant part of total consumption. Take indium,
lighting market will be much closer than it currently is. This for example. One of its largest uses is as a precursor for
will provide longer-term growth. indium tin oxide layers in thin-film panels.
Q
Are there local competitors to your metalorganic There are future uses of these chemicals that could have
business in Asia, which are invisible on a global an impact, such as some of the solar technologies that
scale? And if they do exist, do they take a large chunk are based on gallium and indium, and that could put
of their domestic markets? pressure on the supply chain. We don’t see that right
38 www.compoundsemiconductor.net November / December 2009
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