Chinese May Day Holiday Demand Pickup and Outdoor, Commercial Lighting Peak Season Spurred LED Chip and LED Package Makers’ Utilization Rates to Reach 80%-90% in March

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According to LEDinside, the LED research division of TrendForce, the March revenues of Taiwanese listed LED manufacturers totaled NT$8.109 billion (MoM+17.72%, YoY-12.2%). Due to the inventory stocking in the backlight market and the impending peak season of the commercial lighting market, the orders are expected to pour in well into May. The 1Q12 revenues of Taiwanese LED companies amounted to NT$21.05 billion (-2.5%QoQ, -14.9%YoY). The TV demand triggered by the May Day Holiday will help shed light on the market acceptance of the new TVs.

Revenues of LED Chip Makers

Benefiting from orders for large-size backlight, Taiwanese LED epitaxy companies’ revenues went up, and Taiwanese listed LED chip foundries’ revenues rebounded to NT$3.51 billion in March (+20.1%MoM, -18.5%YoY). However, it represented a 18.5% YoY decrease compared to the same time last year. In addition, with Samsung Electronics reported to cease its production of CCFL LCD TV, the LED companies of Samsung’s TV backlight supply chain, including LED chip makers Epistar, Formosa Epitaxy and LED package maker Unity Opto, saw their utilization rates soar to 80%-90% in March. Moreover, TrendForce indicates, certain Taiwanese companies have successfully broken into Japanese TV backlight supply chain, which resulted in a 15%-20% increase in the total revenue.

The 1Q12 revenues of all the Taiwanese chip makers amounted to NT$8.95 billion (-0.7%QoQ, -21.9%YoY), indicating a sign of rebound. Furthermore, helped by its success in the lighting market, Sanan Optoelectronics’ utilization rate has increased to 70%. The luminous efficacy of Sanan’s 1023 chip reaches 135lm/W-145lm/W, which does not pale in comparison with Taiwanese LED chips. The 1023 chip has entered the lighting market.

 

Revenues of LED Package Makers

Taiwanese LED package makers’ revenues also picked up – the March revenues of Taiwanese listed LED package makers hit NT$4.59 billion (MoM+15.94%, YoY-6.8%). Lextar stated that the backlight market started to revive – the company’s backlight revenue in March increased 8.7% compared to that in February, reaching NT$784 million, which was mainly underpinned by the Japanese and Asia-Pacific markets. In addition, Lextar’s utilization rate hit 70% in March. Benefiting from the strategic planning of the global lighting companies and its IR LED’s solid performance, Lite-on Technology’s March revenue reached NT$ 1 billion. In addition to its stable IR LED production, Everlight has successfully broken into the TV supply chain in China with its 0.5W LED (which does not require lens) and its direct-type LED TV. As a result, Everlight’s revenue went up to NT$1.38 billion in March. Taiwanese LED package makers’ 1Q12 revenues reached NT$12.1 billion, on par with the same time last year.

Prospects for Chinese, European and U.S. LED Lighting Markets

In order to meet the market expectations for lm/$ and to increase market share, LED lighting companies have been striving to make their way into the lighting market. China launched a new subsidy policy for the solid-state lighting products in 2012, arranging public biddings for interior and outdoor lighting products which took place on March 20. According to LEDinside’s “2012 Chinese LED Lighting Market Report,” unlike previous policies which focused on upstream LED chip companies, the latest policy mainly subsidizes end-market products, such as LED street/tunnel light, LED down light and Self-ballasted LED-reflectors (MR series and PAR series). The Chinese government’s favoritism towards local companies contributed to the fact that the bidding winners are mostly China-based lighting companies. The government will offer 30% subsidies for the winners for the aforementioned products. TrendForce believes the policy will greatly stimulate the outdoor lighting market in China. The outdoor LED lights are estimated to reach 1 million units by 2012, and the orders generated by it are expected to go to the major companies.

On the other hand, Europe has become one of the biggest LED markets in the world. Although large LED subsidy policies cannot be seen in Europe, its high electricity price and its cultural emphasis on lighting still makes LED lighting a promising option in the commercial lighting and outdoor lighting areas. According to LEDinside’s “2012 European LED Lighting Market Report,” besides halogen light and fluorescent lighting, the traditional lighting companies in Europe also actively develop LED lighting products and acquire the lighting projects in Europe in cooperation with local architects, designers and global distributors. TrendForce estimates the value of the European LED market to grow to US$3.01 billion by 2012.