Xiamen Changelight [300102:CH] intends to invest around RMB1.6bn (USD230m) to build a semiconductor factory in its home base, Xiamen, as reported by Yicai Global on November 8. According to the company statement, it plans to make multiple semiconductor products such as vertical-cavity-surface-emitting lasers (VCSEL) and high-end LED chips in the factory. The facility will improve the localization of high-end visible light semiconductors and cut the cost of raw materials in terminal products. The construction is expected to take 22 months after starting in the first half of next year and becoming operational in 2021. It will reach full capacity in 2022.
This project has great strategic significance in the development of the company, as it helps the company expand into other markets. VCSEL is the core component of 3D sensing camera in new smartphones. The key technology of VCSEL chip is monopolized by a few large international companies, and is also a weak link in China's laser chip industry. The global VCSEL market size in 2017 was about USD150m with a compound annual growth rate of 17.3% (CAGR), growing to an estimated USD20bn by 2022. Additionally, the project will promote the upgrade of LED chip technology and expand the scope of application and high-end product localization. China is a very big light product manufacturing and consumption country. Based on a report from Freedonia Group, China accounted for 49% of all additional light product demand through 2016.