Taiwan LED chipmakers and packagers out of sync in Q4, observed LEDinside

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September 11, 2009- According to survey of the industry research institute LEDinside, Taiwan's listed LED manufacturers recorded total revenue of NT 6.411 billion in August 2009, a 7.2% growth from July and a 8.3% growth YoY – of which, LED chip makers’ total revenue in August gained 5.2% to NT 2.757 billion, while LED packagers posted NT 3.654 billion, 8.7% growth MoM.

Based on LEDinside’s observation of recent market dynamics, downstream packagers’ order visibility only extends as far as the end of September. As Q4 marks the beginning of a traditionally slow season, demand for small- to mid-sized handset backlight is expected to slide as shipments of handset gradually weaken. As for demand of large-sized backlight, due to the tight supply of LED in Q3, panel makers been over-booking; however, as demand is expected to weaken in Q4, panel makers are adjusting their inventory levels, and this will subsequently weigh on the revenue growth of several downstream packagers.

Capacity utilization of upstream (In)GaN LED chipmakers is still fully-loaded, but there are no signs of improvement for the traditional AllnGaP chips. Since high-brightness (In)GaN LED chips are still in short supply, its order visibility will extend till October, some may even reach year end. In light of this, upstream chipmakers continue to raise capital for their respective expansion plans in an effort to increase (In)GaN LED capacity. As a result, performance of upstream and downstream manufacturers is bound to be out of sync in Q4, said LEDinside.

Taiwan chipmakers recorded total revenue of NT2.757 billion in August, a 5.2% growth MoM, and 14% YoY. In individual performance, sales of upstream chipmakers Epistar, FOREPI, Huga Optotech, and Tekcore all out-performed their previous records in the same period last year. Leading chipmaker Epistar’s revenues hit another all-time high in August with NT 1.249 billion (MoM +3.3%). Meanwhile, FOREPI also celebrated its all-time high, reaching 224 million in revenue (MoM +21%). With continual installation of new equipment by upstream chipmakers in the coming fourth quarter, growth of these chipmakers’ output is expected to continue.

Downstream LED packagers recorded total revenue of NT3,654 billion in August, (MoM +8.7%, YoY +4.4%) with output already surpassing the standard of the same period last year. Leading LED packager Everlight broke through the NT 1 billion mark as it recorded NT 1.117 billion in revenue. Unity Opto is another winner; thanks to its long-term investment in the backlight segment, the firm benefitted from strong backlight demand of mid- and large-sized models, and continued to record high revenue of NT 424 million (MoM +5.5%, YoY 40%). Amid rising demand of white-brand handsets, Harvatek, with application in handsets accounting for a large part of the company’s revenue, posted sales revenue of NT 262 million in August (MoM +7.1%). With an array of new products, there is still much room for revenue growth in the latter half of 2009, according to LEDinside.