Kingbright advises customers of Cree chip supply constraints

Sept. 7, 2009
Extended delivery lead-times for Cree chips could affect the availability of certain LED products from Kingbright, the LED maker has advised its customers.
Kingbright, a leading LED manufacturer based in Taiwan, has contacted its customers and partners to advise them of the effect of extended lead-times for Cree LED chips.

The letter from Michael Wang, Manager of Kingbright Electronics Co., Ltd., says that there has been a recent rebound in the market demand for Kingbright products, and that Kingbright is fully prepared to meet its customers’ needs for the short and long term.

“However,” said the letter, “Cree, one of our major LED die suppliers for blue, green, and white colors, has recently pushed out the delivery lead-times for their LED chips to six months or more.”

The letter states that Kingbright has sufficient Cree dice inventory on hand to meet the expected demand in spite of the long lead-time.

Even so, Kingbright is suggesting that its customers should explore alternative part numbers for new designs, because “unexpected upsides for Cree-related parts may require more time to fulfill.” In other words, if there is a sudden rush in demand for certain Kingbright products, this could result in prolonged lead times because of the constrained supply of Cree chips.

Customers should contact Kingbright to discuss the affected green and blue parts, and the recommended alternatives.

A Cree spokesperson was unable to comment on the specifics of this customer, but referred to statements made during Cree’s last earnings call. Chuck Swoboda, Cree’s CEO, discussed pushing out lead times for chips and components based on increased overall demand.

Swoboda said that the rapid adoption of LED backlighting for notebook computers and TVs has changed the market dynamics for small, chip-based white LEDs and increased demand for high-end blue LED chips. “This has created near-term supply constraints, extended lead times across the industry, and resulted in a more favorable LED chip pricing environment. In the short term, we need to manage our capacity constraints as we continue to invest in new capital to expand our factories.”