According to LEDinside, a research division of TrendForce, in July 2013, the total revenues of LED companies listed on Taiwan’s stock market reached NT$ 10.95 billion (US$ 366 million), with a Year on Year (YOY) increase of 24.9% and a Month-Over-Month (MOM) growth of 4.24%. Listed Taiwanese LED chip manufacturers revenues peaked NT$ 3.85 billion in the same month, while listed LED package manufacturers saw revenues climb to NT$ 7.09 billion. Despite effects from slowed backlight demands, end-market demands have attracted LED manufacturers to quickly expand into lighting applications.
China’s new energy-saving subsidy policies to impact LED backlight field
LED backlight demands eased during the end of 2Q and early 3Q, due to continual scale-down of global LED TV shipments, which also impacted manufacturers backlight orders. Recently some sources indicated China might be launching a new energy-saving subsidy program. If the new program is announced before China’s National Day holidays in October, it could help reduce LED TV’s high inventory levels and stimulate LED manufacturers backlight shipment performance in 3Q. However, the new energy-saving subsidy program will probably have more stringent requirements, with Energy Efficiency Index (EEI) soaring from 1.7 to 1.9 causing LED manufacturers to actively engage in the business of high performance and direct-type LED TVs.
Manufacturers release LED flip chips with improved luminous efficacy and beam angles for lighting market
As demands in the backlight market slides, Taiwan LED manufacturers are adding the proportion of lighting products, mainly through adding OEM and ODM orders from international manufacturers or shipping to European and U.S. distributors to fill the vacancy of capacity utilization. However, whether manufacturers can exit ODM price wars will depend on whether manufacturers can raise production capacity and develop more profitable products that are sophisticated and differentiated from other products in the market.
An overview of market development showed high Color Rendering Index (CRI), and increased beam angles will become a trend in the next two to three years. LED chip manufacturer Epistar had excellent shipment performance as it benefited from international lighting brand orders and maintained stable monthly revenue of NT$ 1.9 billion. As LED for lighting applications mature, Genesis Photonics Inc. (GPI) is also actively transforming and adjusting its product portfolio. Orders from Japanese lighting clients remained stable in 2013, and the company continued to ship flip chips and 3D COB products to China, Japan, Europe, U.S., and emerging market lighting manufacturers. Lighting product revenues accounted for 50% of total lighting revenues, while revenues from flip chips and 3D COBs reached 5%-10% in 2Q, and is expected to reach 10%-15% in 4Q. Chi Mei Lighting Technology Corp. (CMLT) is currently out of business because of management changes. In addition, under the circumstance that Chinese government plans to support two LED chip manufacturers in China. The trend of eliminating weak companies and supporting strong ones has become more evident this year. Taiwanese manufacturers need to be more prudent, when facing future developments.
Lextar LED lighting product sales continued to grow, LED panel light sales in Europe had a MOM growth rate of 25%. The company’s future lighting strategy will be increasing integrated LED luminaire ratio, and adding COB package. Furthermore, cooperating with other lighting manufacturers, Unity Opto Technology’s has shipped products to European and U.S. distributors, while revenues in July were kept at NT$ 610 million shipment.