LEDinside: With Slowly Rising LED Backlight Demand, April Revenue Remains Flat Growth; Yet a High Season Not as High as Expected May Follow Again Due to the Unclear Visibility of End-Product Sales

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LEDinside: With Slowly Rising LED Backlight Demand, April Revenue Remains Flat Growth; Yet a High Season Not as High as Expected May Follow Again Due to the Unclear Visibility of End-Product Sales   

Based on the statistics of LEDinside, the research division of TrendForce, the revenue of Taiwan listed LED manufacturers in April 2011 has reached NTD 9.62 billion (MoM +3.39%, YoY+6.6%). As can be seen from the chip makers’ revenue, the revenue of listed LED chip makers has increased to NTD 4.37 billion with 8.5% rise compared with last April  (MoM+1.8%; YoY+8.5%). On the other hand, the revenue of listed LED package makers has increased to NTD 5.25 billion, up 5% on yearly base (MoM+2.9%，YoY+5%). Generally speaking, LED backlight sales steadily increased and April revenue remained flat growth. 

Revenue of LED Chip Makers in April

For the upstream, overall revenue of LED chip makers reached NTD 4.37 billion (MoM+1.8%，YoY+8.5%). Most makers posted a slight revenue growth, but TV sales didn’t go well. Recent slack in orders from Korean TV brands is likely to lead again to a high season not as high as expected in 2Q. LEDinside predicted that remarkable growth of TV backlight orders will occur later in 3Q. Currently, chip makers are expecting the demand to rise in the LED lighting market. Especially in Japan, the torch demand was significantly boosted as the Japanese government, which is vigorously conducting the post-earthquake reconstruction work, had listed flashlight as one of the necessary livelihood materials. Meanwhile, the energy-saving awareness and environmental protection was largely raised among the Japanese people during the beginning of this year. According to JEL’s statistics, LED bulbs shipment of February 2011 is more than quadrupled on yearly base. However, the yield rate of HB LEDs by Taiwan makers still has room for improvement. Once the HB LED technology is enhanced, the continuously falling gross profit margin will be stabilized. In terms of product development, backlight and lighting are expected to prop up the LED market demand in Q3.  

Revenue of LED Package Makers in April

For the downstream, overall revenue of LED package makers in April reached NTD 5.25 billion (MoM+4.7%，YoY+5%). Owing to steady inventory of the end market and smooth shipment, the Optoelectronics SBG under LiteOn Technology generated an outstanding revenue. Besides, the construction of 1,878 plant factories mentioned in the 12th Five Year Plan by the Chinese government is also expected to bring business opportunities for LED lighting.

Capital Expenditure of Taiwan’s LED Makers

Due to the definite accelerating warm-up of the LED backlight and lighting demands in 2010, Taiwan LED makers significantly expanded and raised the capital expenditure so as to expand production capacity. In the end of 2010, capital expenditure of Taiwanese LED manufacturers were totaled at NTD 21.76 billion, growing by 232% from 2009. 

Chart  2009-2010 Capital Expenditure of Taiwan Listed LED Chip Makers （Unit: NTD million） `

Source: LEDinside, May, 2011

Chart 2009-2010 Capital Expenditure of Taiwan Listed LED Package Makers (Unit: NTD million) 

Source: LEDinside, May, 2011

In view of 2009-2010 capital expenditure by quarter, both upstream chip makers and downstream package makers greatly increased it in 2Q 2010 to facilitate new facilities build-up and new equipment purchase. In particular, with the incentive of China’s MOCVD purchase subsidies, the capital expenditure of chip makers in 2010 amounted up to NTD 18.75 billion. Benefitted from the promotion of the SSL policy in mainland China, LED package makers also established factories in China’s major solid-state lighting production bases. The capital expenditure of Taiwan listed package makers reached NTD 3.009 billion.