LED industry entering the down cycle; recovering after Chinese New Year 2010

2009/12/16------Based on statistics from LED industry research institute LEDinside, Taiwan’s listed LED manufacturers recorded total revenue of NT$6.852 billion in November 2009, down by 1.7% from NT$6.974 billion in October (+65% YoY). LED chipmakers’ total revenue amounted to NT$3.2 billion, up by 1.6% MoM, and LED packagers posted NT$3.652 billion in revenue, a 4.5% MoM decline.
 
According to LEDinside’s observation of recent market conditions, ASP declined by 5~10% as the industry enters the down cycle. In particular, as demand for handset and notebook backlight applications gradually decreases, sales revenue in December is estimated to fall sequentially by around 10%. Despite the recent increase in orders as vendors gear up for the Chinese New Year in 2010, which buffered the decline in November sales revenue, industry players believe that end market demand will only recover in March 2010, after the Chinese New Year.
 
Taiwan’s LED chipmakers recorded total sales revenue of NT$ 32 billion in November (+1.6% MoM, +102% YoY). Affected by the short supply of upstream LED chips, the capacity utilization rate of AlInGaP declined substantially, while that of InGaN continued to be fully-loaded. With the installation of new MOCVD equipment, several LED chipmakers such as Epistar, FOREPI, and Tekcore, all posted historic high revenues in November.
 
As for downstream LED packagers, the total revenue for November is NT$3.652 billion (-4.5% MoM; +42% YoY). Total packaging output exceeded that of the same period last year. A majority of LED packagers recorded declines in their revenues; in particular, demand for handset applications decreased more substantially. In NB applications, despite the inventory replenishment from some panel makers, the overall demand for NB applications remains stagnant due to the slow season. At present, only the demand for TV, as well as for lighting applications, is still considered strong.