Taiwan Photonics Industry & Photonics Festival in Taiwan 2015 1

EPIC Members Event Report

Photonics Festival in Taiwan

16-18 June 2015 Taipei, China

www.optotaiwan.com

Report prepared by Thierry Robin from TEMATYS on behalf of EPIC: Thierry Robin Partner, Product Features Definition TEMATYS 6, cité de Trévise 75009 Paris - France Tel : +33 6 74 64 52 21 trobin@tematys.com www.tematys.com

About the EPIC Members Event Reports Initiated by the founder of EPIC Dr. Thomas Pearsall in 2003, these reports are prepared by members of EPIC to the benefit of the wider community. If you did not have a chance to attend the event but would like to know some key highlight, this report is for you. Emphasis is placed on exploring technical and business opportunities for the members of EPIC.

Taiwan Photonics Industry & Photonics Festival in Taiwan 2015 2

Taiwan Photonics Industry & Photonics Festival in Taiwan This report originates from a visit to Taiwan for the Photonics Festival and for the annual meeting of the International Optoelectronics Association (IOA) of which EPIC is member. This short report details the size and state of the Taiwan photonics industry and gives the exhibition highlights.

The Taiwan photonics industry is expected to create a production value of US$ 71 billion in 2015. Among all, LED components, solar cells, flat panel displays and optics components productions all rank top three in the worldwide market and make Photonics Festival in Taiwan (PFT) an important photonics exhibition.

Taiwan Photonics Industry According to PIDA (Photonics Industry and Development Association), the production value of the Taiwan photonics industry reached US$ 67 billion in 2014, which showed little change (-3%) from 2013, accounting for about 12% of the total global photonics industry with value of US$ 577 billion. In the last three years, the Taiwan Photonics industry has seen its value drop by about 15% mainly because of the declining markets for Flat Panel Displays, image sensor and optical storage components. Looking to the next three years, with inflow of new applications, the Taiwan Photonics industry is expected to return to growth to secure a mainstay position in the global photonics market (see Figure 1).

The top three segments of Taiwan's photonics industry in terms of production values are Flat Panel Displays, Photovoltaic & Solar Cells, and LED & Solid State Lighting. The top three products with the highest growth rate in production values are LED & Solid State Lighting, solar silicon materials and precision optical components & lenses. Compared with 2013, the growth of LED lighting surpassed solar silicon material to claim the first place while the precision optical components and lenses saw significant gains, reflecting the major market trend.

Figure 1 - Taiwan Photonics Production Value 2012-2017 (Source PIDA) Taiwan's LED component production value stayed at the top. It is estimated that the production value of Taiwan’s LED components in 2014 was able to reach 5.4 billion US dollars in 2014 with a market share of about 24% globally. But with its rapid rise in recent years, the mainland Chinese LED components industry has emerged as a competitor for the Taiwanese LED industry. China has shifted from the production of traditional lighting to LED lighting components to remain globally competitive. By contrast, Taiwan will see an increasingly unfavorable trend in the long-term development of LED packaging and module industries. The Taiwanese LED industry is looking for

Taiwan Photonics Industry & Photonics Festival in Taiwan 2015 3

high-profit markets. For this purpose, Taiwan needs to focus on several high-potential niche products to strengthen the differentiation of the products such as UV and IR LED applications.

The production value of Taiwan's panels approximated US$ 45 billion in 2014 with an annual decline rate of 1.4%. Taiwan's display industry has matured in 2014, and a flat growth is expected for the future. In 2014, there has been a consolidation of the Taiwanese photovoltaic industry for increased competitiveness: it still showed a positive growth with the production value reaching US$ 5.6 billion, representing 11% growth over 2013.

24th Photonics Festival in Taiwan The 2015 Photonics Festival in Taiwan, which combines the OPTO Taiwan, LED Lighting Taiwan, Solar Taiwan, Optics Taiwan, Display Taiwan, Nanotech Taiwan, and Plant Factory Taiwan, have been inaugurated at Taipei World Trade Center Nangang Exhibition Hall on 16 June 2015. Although the exposure size has decreased in recent years, there were about 500 exhibitors (of which more than 90% are Taiwanese) and 20000 visitors. This exhibition is pretty interesting for Europeans who wish to do sourcing on photonic components such as lenses, LEDs, solar cells, etc.

The 2015 Photonics Festival in Taiwan also featured a workshop at the occasion of the “International Year of Light”. Thierry Robin from Tematys represented EPIC and made an overview of the European Photonics Ecosystem. Thierry Robin also represented EPIC at the 20th IOA meeting (International Optoelectronics Association) and strengthened the link with Taiwan.

Promoting the European ecosystem, representing EPIC, networking to benefit the members of EPIC. LED Lighting Taiwan has shown the strength of Taiwan LED industry. Leading LED companies have a booth to demonstrate their latest products and technologies: Epistar Corporation, Lextar Electronics Corporation, Lite-On Technology Corporation, Everlight Electronics Co., Ltd., Opto Tech Corporation, EPILEDS Co. Ltd, SemiLEDs Corporation, and TSLC Corporation.

Another interesting part of the exhibition was devoted to optical components. Taiwan’s optics industry is renowned for optical lenses in mobile devices. Driven by the launch of new products by major handset brands, and the demands for precision optical components, Taiwan’s precision optics industry has seen an increase of the annual production value by nearly 20% to about US$ 3.3 billion. The Taiwanese optics industry will now explore the emerging markets: internet of vehicles, optical inspection, and machine vision.

One interesting and rather new part of the exhibition was the “International Plant Factory and Agriculture Facilities Exposition” which was held along with the Photonics Festival in Taiwan. The exhibition stresses the importance of LED applications and expands its reach into forestry, fishery, and animal husbandry applications/business opportunities. The exhibition comprises demonstrations of different types of LED plant factory, latest industrial development and opportunities for cooperation.

Taiwan Photonics Industry & Photonics Festival in Taiwan 2015 4

Perspectives and Opportunities

Figure 3: Internet-of-Things (IoT) catalog - Source PIDA

The majority of Taiwan’s Photonics application markets have gradually matured. In the last three years, the Taiwan Photonics industry has seen its value drop by about 15%. PIDA expects that the production value can stop declining, and reach $71B USD with 6% growing rate in 2015.

Taiwan has to deal with the challenge of competition from other countries (especially from mainland China) and has to transfer the traditional OEM business model to become a service-oriented model for customers. This is an opportunity for European Photonics industry to team up with Taiwanese industry which is able to design and manufacture components and systems in partnership (for example in the fields of Biophotonics, UV/IR sensors, etc…).

Innovative applications and advanced photonics technologies will stimulate the next growth in Taiwan. PIDA expects that UV/IR LED, new photovoltaic technology, AMOLED, Biophotonics can apply to new emerging markets such as IoT, internet of car, smart wearable device, plant factory and green energy.

Among these markets, another interesting opportunity for partnership between Taiwan and EPIC members is the emerging applications in IoT (Internet-of-Things) which are expected to greatly increase and which will make use of various photonic components and systems (See Figure 3).

View all the pictures of EPIC in Taiwan at https://www.flickr.com/photos/epic-photonics/sets/72157655164663926

Taiwan Photonics Industry & Photonics Festival in Taiwan 2015 5

For additional information, please contact the author:

Thierry Robin Partner, Product Features Definition TEMATYS 6, cité de Trévise, 75009 Paris, France Tel : +33 6 74 64 52 21 trobin@tematys.com www.tematys.com

Tematys provides a complete range of services to companies and public organizations in the fields of optics, photonics, sensors and material Engineering. Our clients are companies of any size, from international groups to SMEs and start-up. We have also developed a special expertise in R&D valorization and marketing of emerging technologies for Research Organizations and Laboratories. We provide strategic views on optics and photonics markets for publics for clusters and publics agencies. www.tematys.com

EPIC is the industry association that promotes the sustainable development of organisations working in the field of photonics in Europe. We foster a vibrant photonics ecosystem by maintaining a strong network and acting as a catalyst and facilitator for technological and commercial advancement. EPIC publishes market and technology reports, organizes technical workshops and B2B roundtables, coordinates EU funding proposals, advocacy and lobbying, education and training activities, standards and roadmaps, pavilions at exhibitions. www.epic-assoc.com

220 EPIC Members (1 June 2015) ACAL Bfi, ACREO Research Center, Advanced Fibre Optic Engineering, Advanced Packaging Center, Advanced Vacuum, Agfa Healthcare, AIFOTEC Fiberoptics GmbH, AIM Infrarot-Module GmbH, AIXTRON SE, ALEDIA, Alpes Lasers, ALPHA Route des Lasers, Alphanov, Altechna, ALTER Technology, AMO, Amplitude Systèmes, AMS Technologies, ANDOR, art photonics, ASE Europe, ASE Optics Europe, Australian National University, Avantes, BB Photonics UK, BBright SAS, Berlin Partner für Wirtschaft & Technologie, Boschman Technologies, Bright Photonics, CAILabs, CALIOPA (Huawei), Cambridge Consultants, CD6, CEA-LETI, Centre for Nanophotonics FOM, Centre for Physical Sciences & Technology, Chalmers University of Technology, CIP Centre for Integrated Photonics, CMC Microsystems, Cobolt , COBRA Research School, COHERENT Europe, Convergent Photonics, CSEM, CUDOS, DAS Photonics, Delta Optical Thin Film A/S, DIAFIR, Diamond, Dilas Diodenlaser, DirectPhotonics Industries , Dow-Corning, Dublin Institute of Technology, eagleyard Photonics GmbH, EBARA Precision Machinery Europe, Eblana Photonics Ltd., Edmund Optics GmbH, ElTech, Eolite Systems, ESP KTN, EV Group, EXALOS, ficonTEC Services GmbH, Fogale Nanotech, FOTONIKA - LV, Fraunhofer for Solar Energy Systems ISE, Fraunhofer Institute for Applied Optics and Engineering, Fraunhofer Institute for Laser Technology, Fraunhofer Institute for Material and Beam Technology, Fraunhofer Institute for Reliability and Microintegration, Fraunhofer Institute for Telecommunications, Heinrich Hertz Institute, Glyndwr University Integrated Photonics, Hamamatsu Photonics, Haute Ecole ARC , Heraeus Noblelight, Heriot-Watt University, Hisilicon Technologies (Huawei), Huawei, ICFO - Institute of Photonic Sciences, ICN2 Institut Català de Nanociència i Nanotecnologia , IHP Innovations for High Performance Microelectronics , IKO Science, Imagine Optic, IMT, INL Lyon Institute of Nanotechnology, Innolume, Institut d'Optique Graduate School, INTEC Department of Information Technology, International Laser Center, IPHT Jena , IQE, IREC - Catalonia Institute for Energy Reseach, iXFiber, JePPIX, Keopsys, KIT, KONICA MINOLTA, Laser & Medical Devices Consulting, LayTec, LioniX BV, Lithuanian Laser Association, Luceda N.V., Luger Research, Lumics GmbH, LUXeXcel, M Squared Lasers, M.U.T., Messe Berlin (micro photonics), Messe Munich International, Microelectronics Institute of Barcelona, CSIC, Mikrocentrum, Modulight, Multiphoton Optics, Multitel, MW Technologies, Nanofoot Finland, Nanoscribe, Nanosystec, Nanovation, Nanyang Technological University, Next Scan Technology, NKT Photonics , nlight, NOVAE , Noxant, OCEAN Optics, Oclaro, Onefive GmbH, OPI Photonics, Oplatek Group, OpTecBB, Opticsvalley, Optitec, Optoelectronics Research Centre Finland, Optoelectronics Research Centre UK, Optoscribe, Phoenix Software, Photon Lines, PhotonExport, Photonics Bretagne, Photonics Cluster NL, Photonics Electronics Technology Research Association PETRA, Photonics Finland, Photonics Marketplace, Photontransfer, PI miCos GmbH, Pilot 3D, Plasma-Therm, PNO Consultants, Politecnico di Torino, PolyPhotonix, Powerlase, Prima Electro, PSA / Peugeot Citroën, Quanta System , Quantel, Raylase, Resolution Spectra Systems, Robert Bosch GmbH, Rofin Sinar Laser GmbH, RP Photonics Consulting GmbH, SABIC Innovative Plastics, SAES Getters, S.p.A, SAFC Hitech, SATRAX, Scuola Superiore Sant'Anna, See Fast Technologies, Sensofar Metrology, SensUp, Seren Photonics , SMART Photonics, SMT Partner, SOFRADIR, SOITEC, SPI Lasers UK Limited, SQS Vlaknova optika, STMicroelectronics, Süss MicroOptics, SWISSPHOTONICS, TE Connectivity, Technical University of Berlin , Technobis Group, Technobis Group, Technospark Nanocenter, TEMATYS, Thorlabs, Thorn Lighting (Zumtobel), Time-Bandwidth Products, Inc., TNO, Toptica, Torbay Development Agency, Tridonic GmbH & Co KG (Zumtobel), Tyndall National Institute, u2t Photonics, University "Mediterranea" of Reggio Calabria, University Carlos III of Madrid, University College London, University of Barcelona, University of Nottingham, University of Nottingham, University of Roma Sapienza, University of Sheffield , University Paderborn, Vario Optics AG, Vertilas, VI Systems GmbH, VLC Photonics, VTT, WJA Electron, WOM World of Medecine GmbH, Workshop of Photonics, Wroclaw University of Technology, XiO Photonics, XL Strategy, YELO, Yenista, Yole Développement,

Zumtobel. www.epic-assoc.com/membership

Taiwan Photonics Industry in

Worldwide Market & PIDA activity 2015

Murphy Lin

Director,

Photonics Industry & Technology Development Association

• 17th June, 2015

• Taipei, Taiwan

20th International Optoelectronics Association Meeting by PIDA

Photonics

Industry

Photovoltaic - Crystalline Silicon Materials - Thin Film Solar Cells - PV Cell Modules - PV Power System

FPD (Flat Panel Display) - FPD Equipment - LCD Material & Component - TFT-LCD Panel & LCM - TN/STN-LCD - Touch Panel - PDP, OLED, E-paper, 3D

Optical Storage - Optical Disc Drive & Player - CD, DVD, BD Optical Disc

Bio-photonics - Medical imaging: - Bio-photonics sensor - Optical therapy

Precision Optical Lens & Module (for 3C products) - Optical Glass / Plastic Material - Lens Module - Compact Camera Module

Optical Fiber Communication - Optical Fiber & Cable - OFC Components - OFC Equipment

Image Sensor & I/O Devices - CCD, CMOS, PD - Scanner, Bar Code Reader, Fax - Laser Printer, Copier - DSC, Camcorder

LED & Lighting Application - LED Epi & Packaging - LED Lamp

Photonics Industry Categories

LASER - CO2 / HeNe Lasers - Fiber LASER - LASER Diode - Material processing machine

2

Outline

• Overview of the Worldwide Photonics Market and

Taiwan Photonics Industry

– Worldwide LED Market & Taiwan LED Industry

– Worldwide PV Market & Taiwan PV Industry

– Worldwide FPD Market & Taiwan FPD Industry

– Taiwan Bio-photonics Industry

• The Next Big Things?

• 2015 PIDA’s activity & Photonics Festival in Taiwan

• Summary

Information

Service

International

Cooperation

Promotion

Efforts Publication

Industry

Research

Photonics Industry & Technology Development Association

Since 1993

• Exhibition

• Seminar

• Membership Service

• Project Execute

• Consulting Service

5

Overview of Worldwide Photonics Market &

Taiwan Photonics Industry

Worldwide photonics industry scale will reach 629B USD

The Scale of Worldwide Photonics Production Value 2012~2017

Source: PIDA, 2015

* The CAGR is 7% during year 2012~2017 lower than the rate 10% of year 2010s.

6

Unit: $ Billion USD

1%

0%

8%

9%

-6%

-18%

5%

11%

19%

6%

CAGR

Taiwan photonics industry scale will reach 71B USD

The Scale of Taiwan Photonics Production Value 2012~2017

* The CAGR is 1% during year 2012~2017 lower than the rate 20% of year 2000s.

7

Unit: $ Billion USD

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

0

10

20

30

40

50

60

70

80

90

Source: PIDA, 2015

7%

11%

12%

4%

-4%

-7%

-1%

10%

9%

1%

CAGR

Top ten photonics products of Taiwan

Rank Production Value Revenue Growth Rate Rate

1 TFT-LCD Panel & Module 30,217 LED Lighting 30%

2 Touch Panel 7,380 Crystalline Silicon Materials 27%

3 LCD Material & Component 6,810 Precision Lens & Camera Module 21%

4 Silicon/Thin Film Solar Cells 3,401 Laser Diode 19%

5 Precision Lens & Camera Module 3,254 Photo Therapy Device 13%

6 LED Packaging 3,148 LED Epi & Wafer 12%

7 Optical Drive 1,890 LED Packaging 9%

8 Digital Still Camera (OEM) 1,632 Medical Image (X-Ray Image…) 8%

9 Crystalline Silicon Materials 1,578 CMOS Image Sensor 7%

10 LED Epi & Wafer 1,574 BioSensor 6%

The list of products or module with high value & growth 2014 Unit: $ Million USD

* Top 10 products contributed 90% of total Taiwan photonics revenue as

usual. 8 Source: PIDA, 2015

Worldwide LED Market &

Taiwan LED Industry

9

Unit: $ Million USD

The Worldwide Market of LED & Lighting Application 2012~2017

The scale of worldwide LED industry will reach 54B USD with 19% growth

10 Source: PIDA, 2015

Unit: $ Million USD

The Production Value of Taiwan LED Components & Lighting 2012~2017

The scale of Taiwan LED industry will reach 6.2B USD with 16% growth

* The mainly LED manufacturers include Epistar, Lite-On, Everlight in Taiwan.

11 Source: PIDA, 2015

Unit: $ Million USD

Source: PIDA, 2014

The trend of worldwide lighting market by lighting technology

Penetration Rate 2010 2012 2013 2014(E) 2015(F) 2020(F)

Incandescence / Others 34% 26% 22% 18% 15% 6%

Fluorescence 62% 62% 61% 60% 58% 27%

LED Lighting 3.8% 12% 17% 21% 27% 62%

OLED Lighting 0.1% 0.1% 0.2% 0.3% 0.6% 5.3%

Lighting Market 2010 2012 2013 2014(E) 2015(F) 2020(F)

WW Lighting Market 98,585 109,023 111,587 115,204 117,384 128,519

WW LED Lighting 3,775 13,199 18,791 24,128 31,125 79,559

LED is expending penetration rate in lighting market gradually

Unit: $Million USD Unit: $Milliion USDD

Source: PIDA, 2015

Traditional lighting giants dominate the LED lighting market

Top 10 lighting

companies

Top 10 LED lighting

companies

2014 2014

What we expect next for LED application: UV/IR

0

50

100

150

200

250

2009 2010 2011 2012 2013 2014 2015

air purification

instrumentation and

sensing

counterfeit analysis

medical phototherapy

R&D

water purification

UV Curing

Source: LEDs magazine / OIDA, IOA, EPIC, 2012

UV-LED market history and forecast

Unit: $Million USD

Worldwide PV Market &

Taiwan PV Industry

15

Worldwide Photovoltaic Industry Production Value 2012~2017

The scale of worldwide PV industry will reach 199B USD with 18% growth

Unit: $ Million USD

16 Source: PIDA, 2015

The Production Value of Taiwan PV Industry 2012~2017

The scale of Taiwan PV industry will reach 6.6B USD with 19% growth

Unit: $ Million USD

* The main players include SAS, NSP, Motech, Gintech, E-ton Solar 17 Source: PIDA, 2015

Worldwide FPD Market &

Taiwan FPD Industry

18

Worldwide Industry Scale of Flat Panel Display 2012~2017

The scale of worldwide FPD industry will reach 195B USD with 5% growth

Unit: $ Million USD

* Global FPD market matured with low and flat growth rate. 19 Source: PIDA, 2015

The Production Value of Taiwan FPD Industry 2012~2017

Taiwan FPD industry expects recovering to 46.4B USD with 3% growth

Unit: $ Million USD

* Taiwan mainly LCD manufacturers are AUO, Innolux. 20 Source: PIDA, 2015

Display panel expected to be used in mobile market

40.0

48.0

52.5

57.5 60.0

65.0

43%

20%

9% 10%

4%

8%

0%

10%

20%

30%

40%

50%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2011 2012 2013 2014 2015(E) 2016(F)

Sh

ipm

en

t (M

pcs)

Automotive Display Market-Global

Unit: Million Set

Source: PIDA, 2015

Global Automotive Display Panel shipment forecasting

* LED, PV, sensor, laser & optics can be applied on car market as well.

Taiwan Bio-photonics Industry

22

2014 Taiwan Biomedical Industry forecast 1.5B USD

• Taiwan’s biomedical industry remain increasing, 2014 about 1.5B USD, and forecast to 2017

about 1.9B USD. From 2012~2017, CAGR=7%.

• Biomedical industry including 3 major subareas: biosensor, medical image, photo therapy, each

one occupied 47%, 23%, 30% in revenue.

Unit: $ Million USD

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

-

100

200

300

400

500

600

700

800

900

1,000

2012 2013 2014(E) 2015(F) 2016(F) 2017(F)

Source: PIDA, 2015

The Next Big Things?

24

IoT catalog

Wealth care / Wearable Devices

Smart Grid

Smart Traffic / Internet of Car

Smart Home / Surveillance

IoT

Sensing

Security

Smart life

Display in car

Sport device

Medical care

Service terminal

Smart meter

Energy storage

Micro-Grid

Communication

Car

App. Service

Image sensor, RFID

CCTV, POS,KIOSK,

Screen everywhere,3DP

LCD, Projector in car

Free Space Optics, LiFi

GPS, Laser for measuring distance

Transceiver in meter

Solar system

Sensors in watch, cloth

LCoS for Glasses

IoT, wearable devices, big data, cloud are the same thing

350

2,600

5,700

11,300

16,300

18,300

643%

119% 98%

44% 12%

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

500%

550%

600%

650%

700%

750%

800%

0

5,000

10,000

15,000

20,000

2012 2013 2014(E) 2015(F) 2016(F) 2017(F)

Revenue (M$USD)

Y/Y(%)

Wearable display device market Global IoT industry development trend

Unit: Billion Set

* 2014 global IoT device about 14.4B set, and

forecast to 2020 approach 50B set.

Source: PIDA, 2015 Source: Cisco, 2015

* Global wearable display device usage

increasing, 2014 growth rate about 119%.

Unit: $ Million USD

2015 PIDA’s activities &

Photonics Taiwan exhibition

6+4 Cross-industry platform with various partners

• Compound Semiconductor • Optoelectronics Devices • Optical Input / Output & Storage Device • Laser Applications • Vacuum Coating • Precision Instruments / Equipment • Precision Optics

• Optical Lenses / Module • Optical Components • Coating Products • Optical Materials• Manufacturing Equipment

• LED / OLED Light Source, Package / Module/ Engine • LED / OLED Lighting Fixture • LED Applications • LED / OLED Materials • LED / OLED Equipment

• Photovoltaic(PV) System and Installations • Materials • Solar Integrated Product and Applications • Production Equipment • PV Module • Solar Cell • PV Projects

Special Zone • Bio-photonics • Advanced Research • Laser Application • 3D Printing

3D Printing systems & equipment

3D measurement & software

3D scanner

Reverse Engineering

• LCD • Material/ Components • LCoS / Projector • Manufacturing Equipment

Precision Optics

• Optical Lenses / MM

C d S i

Photovolttaic(PV) S

Manufactturing Equ

Total 502 companies

with 1011 booths

IYL Zone in Photonics Taiwan

• The majority of photonics application markets are gradually mature. The future

growing trend could depend on macroeconomic.

• We expect that the production value of Taiwan photonics industry can stop

declining, and reaches to $71B USD with 6% growing rate in year 2015.

– Taiwan have to deal with the challenge of competition from regional countries.

– Taiwan have to transfer the traditional OEM business model to become a service- oriented /

cooperation model for / with global customers.

• There must be innovative application and commercialized advanced photonics

technology to stimulate the next growth.

– We expect that the LED lighting, new photovoltaic technology, AMOLED, bio-photonics can

create new markets

– Those can apply on IoT, internet of car, smart wearable device, plant factory, green energy.

• In our faith, future ecology society need photonics technologies.

Summary

Thank You for Your Attention!

Welcome to Photonics Taiwan 2016