LED Industry Faces Slack Season in the Short Term and LEDinside Forecasts that Growth Momentum will Rebound after 1Q11

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LED Industry Faces Slack Season in the Short Term and LEDinside Forecasts that Growth Momentum will Rebound after 1Q11

Based on the analysis and statistics of LEDinside, a research division under TrendForce, the total revenue of the listed Taiwan LED manufacturers returned to 8.504 billion NTD in November 2010, compared with the figure of 8.69 billion NTD in October (MoM -2.1%, YoY+24%).  Additionally, the revenue for both LED chip manufacturers and package makers has simultaneously dropped in November. It is forecasted that due to the stock-taking and the traditional slack season, the sales performance in the short run may be difficult to recover. However, in terms of the outlook of lighting market in 2011, governments in several countries have launched a series of subsidy policies one after another, so the total market demand in 2011 will have further room for growth. In addition, LEDinside estimates that the penetration rate of LED backlight in TV will take off from 18.5% in this year to over 43% in 2011. Although concerns of high LCD TV inventory still remains in the short term, it is forecasted that the growth momentum of the LED industry will rebound after the first quarter of 2011.

LED index (LEDX), compiled by LEDinside, observes the LED industry through the performance of market value. Currently, LED epitaxy index (Chip LEDX) has increased to 4,235, while the LED package index (Package LEDX) has come to 4,866, which runs counter to the fundamental plane. However, it can be seen that the people are still confident in the development of LED industry. 

The LED chip manufacturers’ revenue performance in November

In November, the revenue of Taiwan upstream chip manufacturers was 4.02 billion NTD, declined by 2.8% compared with October (YoY+25.4%).  Moreover, the accumulated revenue of Epistar is around 18.3 billion NTD, and the total revenue of 2010 is expected to reach over 20 billion NTD, accounting for 40% of annual production value of Taiwan’s LED chip makers. The sales performance of Genesis Photonics grows stably and sets another record high, with 2.7% MoM and 183.7% YoY. Jiangsu Canyang Optoelectronics Co., Ltd., invested by Forepi, will open and start production in mid-December and be equipped with 20 MOCVD equipments by the end of this year. Besides, the scale of the plant will double next year, and the MOCVD equipments are forecasted to reach 60 sets. To sum up, the future development of Taiwan manufacturers in China and the policies run by local governments will play a quite important part in the LED industry development for both the consumption and the equipment supply .

The LED package factories’ revenue performance in November

Referring to downstream LED package factories, the total revenue in November 2010 soared to  4.48 billion NTD, which grew by 22.7% compared with October 2009 but slightly declined by 1.4% compared with last month. Generally speaking, the fourth season confronted the traditional slack season. The orders of new big-sized LED backlight used in TV have started shipment, but the market will fill the gap caused by the declining sales of old LED backlight. Besides, the sales of small-sized LED backlight used in consumer products, such as mobile phones, have dropped in slack season.  Therefore, the growth momentum of total LED sales performance  will restart after the first quarter of next year.

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