LEDinside: New LED TVs Fueled LED Utilization Rate, Orders to Continue Pouring in well into April

According to LEDinside, a research division of TrendForce, the February revenues of Taiwanese listed LED manufacturers totaled NT$ 6.92 billion (MoM+14.1%, YoY-4.5%). Due to the inventory stocking in the backlight market and increasing bidding projects in the lighting market, LEDinside expected the high demand to persist well into April, 2012.

LED Backlight Market Outlook
Korean panel makers launched new LED TVs in 2012, which stimulated the demand and in turn increased LED companies’ utilization rates. As a result, LED makers’ revenues rebounded by 15%-20% compared to January. Following Samsung Electronics reported to cease its production of CCFL LCD TV, the utilization rates of the LED suppliers in Samsung’s LED TV supply chains, including Epistar, Formosa Epitaxy and the package makers, like Unity Opto, has been climbing since March. However, according to LEDinside, Samsung was the sole Korean TV maker that launched low price direct-type LED TV; LG and other Japanese TV brand vendors remained conservative about the market acceptance of the new LED TVs. The panel makers’ purchasing strategies depended on the outlook for the end market sales in 2Q12, which closely affected the LED industry’s development in 2012. In light of the uncertain prospects for the backlight market, players still have to place certain emphasis on the lighting market to be on the safe side.

LED Lighting Market to Benefit from China’s Lighting Subsidy
As for the lighting market, in order to meet the market expectations for lm/$ and to increase market share, LED chip and package’s prices for lighting usage continued to plunge, but the companies still strived to make inroads into the lighting market. Notably, the financial subsidy policy issued by China’s official ministries has generated a considerable amount of attention in the industry. China launched a new subsidy policy for the solid-state lighting products in 2012, arranging public biddings for interior and outdoor lighting products which are set to take place on March 20. Nonetheless, during China’s previous endeavor “Solid-state Lighting Demonstration Projects,” besides Philips and Panasonic, all the other bid winners were China-based companies; LEDinside expects the same results this time around. Given that China’s LED chip and packaging quality is still not quite on par with  global big names, European, American, Taiwanese and Korean companies will still win bids despite China’s efforts to increase the self-sufficiency of LED chip and package.

LED TV Backlight Demand Propelled LED Makers’ Utilization Rates"
Benefitting from the increasing large-size backlight orders, Taiwanese listed LED chip foundries’ revenues amounted to NT$2.96 billion in February (+17.4%MoM, -16%YoY). With Samsung’s TV backlight orders, Epistar and Formosa Epitaxy’s revenues went up 15%-20% and reached NT$1.185 billion and NT$320million, respectively, with utilization rates hitting 80%. The utilization rates in March is expected to further increase to 90%. Additionally, with the demand for residential lighting beginning to pick up, Epileds’ February revenue hit NT$9.78million, representing a MoM 55.2% increase.

The new LED TVs will continue to fuel LED demand till 2H’Mar. On the other hand, Chinese TV makers expect the May Day Holiday to stimulate the demand, so they have been increasing their TV shipment.





LED Package Makers Revenue Performances
The revenues of Taiwanese listed LED package makers in February hit NT$3.96 billion (MoM+11.7%, YoY+6.5%). Lextar’s revenue reached NT$721million, a 19.1% MoM increase, with the utilization rate increasing to 70%. The company plans to set up lighting product assembly lines in its Suzhou plant in the hope of reducing manufacturing cost and reaching economies of scale. Benefiting from the increasing residential lighting market demand in Japan and its IR LED’s solid performance, Lite-on Technology’s revenue totaled NT$970 million in February. The company is expected to put more emphasis on the LED industry.