LEDinside: Growth Momentum in Major Markets Weakening, LED Firms’ July Revenues Stay Flat

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According to LEDinside, the LED research division of TrendForce, revenues of listed Taiwanese LED firms totaled NT$8.95 billion (MoM+1.68%, YoY+2.4%) in July 2012.

According to LEDinside research, TV annual shipment for 2012 will see a mere 5% YoY growth, whereas monitor shipment will suffer a downturn. Notebook demand for 3Q12 is expected to be weak, but new products releases in Mid-3Q12 will pick up the demand and make the annual shipment stay flat compared to that in 2011. As for smartphones, annual shipment forecast revised from 660 million units to 606 million units. Tablet PC market remains one of the major focuses in 2012. As for LED lighting, affected by the European debt crisis, orders of LED lighting firms whose business relies heavily on the European market saw decreases ranging between 35% and 40%, not to mention the demand for large lighting projects has yet to pick up. In all, although LED manufacturers benefited from the demand climb in 1H12 and performed better than the same time last year, growth momentum has been on a decline with the market outlook starting to turn murky. Therefore, outlook for 2H12 will not look up.

Revenues of LED Chip Makers

Benefiting from large-sized backlight module, display, and consumer electronics orders, revenues of Taiwanese listed LED chip makers amounted to NT$3.86 billion (MoM+0.5%, YoY- 2.8%) in July 2012. Due to the increasing display demand, Taiwanese package makers started to  place order to Chinese companies, which resulted in a surge in orders for Chinese chip companies in July. It is clear that the price gap between Taiwanese chips and Chinese ones will further narrow. In addition, benefiting from the demand hike in display market, Opto Tech Corporation’s revenue increased by 14% to NT$ 610 million.

Due to its plans to expand capacity and technology development, Epistar announced the plan to acquire HUGA. Currently many companies have formed strategic alliances with other firm (Nichia and Citizen, TOYODA GOSEI and SDK, Epistar and HUGA) in order to protect their core technologies and meet the capacity expansion needs. This trend will persist.

LED Package Makers Focusing on OSRAM and Samsung Patent Settlement

Revenues of Taiwanese listed LED package makers in July 2012 totaled NT$5.09 billion (MoM+2.55%, YoY+6.7%). Lite-On Technology’s LED lighting component mass production is going smoothly with the orders from brand vendors continuing to pour in well into 3Q12. Given the stable growth in the IR market, the company’s July LED revenue totaled NT$ 1.12 billion.

Lextar continued to benefit from the Japanese lighting market. As for its lighting products, light tube and panel lights are currently the better-selling products. Lextar plans to expand production of lighting component and lighting products. Moreover, benefiting from increasing Chinese backlight orders and tablet PC orders, Unity Opto’s July revenue saw a steep surge to NT$770 million. However, with cloudy market outlook, weak consumer confidence and the fact that Samsung and OSRAM reached a settlement on their patent case, Samsung may decrease orders placed on Taiwanese firms, which will affect Taiwanese companies’ backlight business. Taiwanese companies should try to acquire more clients in order to avoid the possible downturn.

Perspective from LEDinside

With the stagnant global economy, governments’ support for the LED industry plays an integral role. Presently project bidding market remains in a slump, and lighting companies shift their focus to the new Chinese LED subsidy bidding process. Winning the bidding can be a boost for company’s image and will help its marketing. In conclusion, it is a win-win-win situation for LED companies, government, and consumers.