TV backlight orders see no improvement while revenues of LED vendors generally slipped in September

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Based on the analysis and statistics of LEDinside, which is a research division under TrendForce, in September this year, listed LED manufacturers in Taiwan have total revenue of 9.736 billion NTD, an 8.1% decline compared with August revenue of 10.593 billion NTD and 45.8% rise in YoY. The revenue for LED chip manufacturers in September reached 4.554 billion NTD, down 6.9% from August. The revenue for LED package manufacturers in September amounted to 5.182 billion NTD, down 9.1% from August. Compiled by LEDinside, LED index (LEDX) observes the industry through the performance of the LED industry market value. Currently, the Chip LEDX is at 4140.9 points, while the Package LEDX has come to 4849.1 points, reflecting a lack of market confidence in the LED industry. September revenue in the LED industry was further widely affected by the inventory problem of LCD TV vendors.

LED Backlight Market Analysis

Although the hot LCD TV sales of National Day Holidays in China is expected to solve part of the inventory problem, most brand vendors only offered low-priced promotion on CCFL TVs. The sales performance of LED backlit TVs is good as well but it mainly digests the inventory prepared by TV or panel manufacturers in the beginning of Q3. Therefore, for LED industry players, TV backlight orders haven’t improved and most of them still expect the LED backlight TV to grow fast in next year.

LEDinside predicts the LED TV market size will reach 92 million sets in 2011, nearly tripling the 2010 growth. The edge-type LED backlit LCD TV has greater potential than the direct type. It has advantages both in the cost and shape with thinner size.

As for the IT product backlight, WitsView, the other research division under TrendForce, says that due to the panel cost for LCD monitors and notebooks, manufacturers are unwilling to slash price and have waged the price protection battle. Since October, the price has stopped falling. In light of revenue generated by LED manufacturers, as the market, previously over pessimistic about the IT product shipment, has started to revise the shipment forecast, IT product backlight orders for some LED vendors show positive signs.

Revenue of Chip Manufacturers in September

The revenue of Taiwan’s chip manufacturers in September is observed to slip 6.9% from August and rise 55% YoY. Total revenue of chip manufacturers in Q3 still grew 11.6% compared with Q2. Because of the inventory adjustment by the Korean panel makers, backlight orders for large-sized panels started to suffer from its impact. Besides, as MO source material shortage was tighter and the price of sapphire substrates was rising, profits were shrinking. Various factors led to a small reshuffle in September revenue ranking which had remained stable for over the past six months. In view of Q3, there were still chip manufacturers making outstanding performances, especially stable shipment of large-sized panels unaffected by Korean manufacturers. For example, Genesis Photonics not only constantly set record high in single month revenue with a monthly growth rate of 4%, but also rose by 37.9% on the quarterly base, which was attributed to stable LED TV backlight products shipment and the emerging benefits from the cooperation with JFE Engineering Corporation. In addition, leading chip manufacturer, Epistar, dropped 4.8% in monthly revenue but still increased 8.3% compared to the previous quarter. On one hand, it has joint ventures with Japan’s Toyodo Gosei to form the TE OPTO Corp.; on the other hand, it has obtained LED patents thanks to cross licensing agreement. Thus, Epistar is in a better position on the road map of lighting product capacity. Moreover, as China provides subsidies with chip suppliers in the case of MOCVD purchases, both joint-ventures and sub-investments in Mainland China can take the geographical advantage to know more about the Chinese LED market and gradually see the outcome of production from 2011. 
 

 

Revenue of Package Manufacturers in September

LED package manufacturers posted a revenue growth of 38.5% YoY but declined 9.1% from August. Q3 revenue slightly increased 2.7% from Q2. Lite-on has made an excellent performance in the LED development, setting a record high of revenue of over 1.3 billion NTD. This is because its new plant in Changzhou has started production and it expanded further in the backlight and lighting markets. Meanwhile, the revenue of LEDTech Electronics for Q3 decreased dramatically due to the slack demand of low temperature light bars and special-purpose lighting.