Blue LED chip sales are booming and chipmakers Epistar, Formosa Epitaxy, Tekcore, Arima Optoelectronics, Genesis Photonics and Huga Optotech is expected to increase by 25 per cent to five billion chips per month in 2010.

According to DigiTimes the reason for the boom is that everyone wants to use them to backlight their large-size televisions. The makers' blue LED chip capacity is expected to increase by 19 per cent to four billion chips per month in 2009, with MOCVD machines totalling 326 sets.

Epistar chairman Lee Biing-Jye said that there is a global supply shortage of epitaxial wafers used to make LED chips for back light units (BLUs) and this will not go away until 2012.

While manufacturers are flat out next year they expect the shortage to get even worse. LED shortage will remain in 2010 despite chipmakers' efforts in capacity expansion, the sources said. With panel makers and BLU makers increasing LED models to about 15-20 per cent of their total shipments in 2010 from the previous 10 per cent share, LED demand from the LCD TV sector will be twice as much that from the handset sector in 2010.