A recent intellectual property dispute on the other side of the ocean - US VCVD equipment manufacturer Veeco sued the graphite pallet manufacturer SGL for intellectual property infringement, which has affected the nerves of China's LED upstream companies.
What seems to be a dispute between two foreign companies, but why is it in China? What is the relationship between the lawsuits between them and Chinese LED companies?
Intense contest behind the lawsuit
The LED industry is very familiar with Veeco. Veeco is the world's leading supplier of semiconductor equipment. Its main product, MOCVD (Metal Organic Chemical Vapor Deposition), is the most critical equipment in the production of LED chips.
Graphite trays are the most important consumable parts of MOCVD equipment and are closely related to the design of the equipment cavity and have a service life of only 1-2 months. Due to the complicated coating process on the surface of the pallet, only the German SGL, Japan Toyo Carbon and the Dutch Xycarb are available.
Veeco's MOCVD equipment uses high-speed rotating pallets and automatic loading and unloading design principles. It has outstanding advantages in production capacity, automatic production, maintenance and so on, and is widely welcomed by LED extension manufacturers. Veeco has occupied more than 60% of the global MOCVD equipment market since 2014.
In recent years, domestic MOCVD suppliers have been narrowing the technological gap with Veeco products, and relying on better cost performance and more convenient after-sales service to gradually gain customer recognition, has threatened Veeco's leading position in the domestic market, resulting in its continuous loss for many years. And a reduction in market share.
In the face of the strong rise of domestic manufacturers, Veeco has adopted a strategic bottom-up plan for a domestic MOCVD manufacturer.
In April 2017, Veeco officially sued graphite pallet manufacturer SGL in the US New York State Court, alleging that it infringed Veeco's four patents (US6506252B2, US6685774B2, US6726769B2 and USD690671S1, covering the overall design protection of the main structure of the equipment and the pallet), requirements It stopped selling and compensated for huge losses.
Are domestic MOCVD manufacturers affected?
The lawsuit seems to have no direct connection with domestic MOCVD manufacturers, but in fact it is the Xiangzhuang sword.
At present, all three suppliers have indicated that they will no longer provide the allegedly infringing pallets and seek a solution to reconcile with Veeco. This is undoubtedly a good thing for the domestic MOCVD manufacturer and its customers. Regardless of the outcome of the lawsuit, there is currently a dilemma of being unavailable and being forced to suspend production.
In the highly cyclical and highly competitive LED epitaxial market, some equipment losses are small, but missed the fleeting capacity layout opportunities, which will inevitably lead to a major strategic defeat and even be forced out.
The domestic manufacturers of MOCVD equipment are Zhongwei Semiconductor, Zhonghao Optoelectronics, the two companies registered in Shanghai, and the entrepreneurial teams are all from the United States. It is reported that Lieutenant is purchasing pallets from another manufacturer, this time has not been affected, and the pallets can be supplied as usual. In addition to this reason, it is said that Lieutenant did not completely replicate Veeco's technology in product design.
For the influence of domestic industrial chain manufacturers, an influential expert in the LED industry said that the graphite tray is a key consumable for MOCVD equipment. If the matching tray is not available, the equipment will not be used. For the customer, this is undoubtedly a big problem.
The lawsuit will have a great psychological impact on manufacturers who want to buy domestic MOCVD equipment to manufacture LEDs. But because most of them use imported equipment, it is not enough for LED chip manufacturers to make a real impact.

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