January 13, 2012 — Taiwan’s light emitting diode (LED) chip and package manufacturers failed to reproduce the booming revenue growth of H1 2011 in the second half, according to LEDinside, a research division of TrendForce. Given inventory pressure, many LED makers are actively seeking joint ventures and improving product quality to create greater product differentiation.
LEDinside expects the difficult economic climate to weed out weaker LED makers. New manufacturers are still considering entering the LED market on the potential of LED lighting. Also read: China lights up LED roadmap; Taiwan leaders seek similar support
In terms of revenues in December, the upstream players’ revenues plunged by 30% YoY while the downstream package makers’ dipped by 10% YoY. The difference is attributed to LED chip makers’ higher base year value of December 2011. In December 2010, products such as tablet PCs and LCD TVs underpinned the backlight demand, while currently the LED chip market is slightly oversupplied, with prices plummeting quickly. Since LED package manufacturers supply the end market, the upstream oversupply has less impact on them, and they are benefitting from a recent surge in backlighting demand.
Revenues of Taiwan’s LED chip makers dipped to NT$45.4 billion, representing a 7% decrease compared to 2010. Revenues hit NT$2.64 billion in December supported by the end-market demand surge and the increasing rush orders, but this was a 30% decline from December 2010.
In 2011, revenues of Taiwan’s LED package makers totaled NT$54.92 billion, a 3% decrease compared to 2010. The revenues of Taiwanese LED package makers in December hit NT$3.9 billion, a 10% decline from the prior year.
Around the LED industry:
Epistar has foreseen the slowdown in backlight growth after 2013, and the demand from the lighting market will have to fill the vacancy. For this reason, Epistar has been actively seeking joint efforts with downstream lighting companies, increasing overseas market share through reinvestment. In addition, the company also cooperates with global lighting big names in terms of technology to secure its position in the light market. Epicrystal Cooperation (Changzhou), a subsidiary company of Epistar, began its production in September 2011.
The luminous efficacies of Forepi’s chips reached 120lm/W in 3Q11. Its production will increase considerably in 2012. Moreover, the Japanese big brand Mitsui & Co. brings Forepi a list of clients. LEDinside believes that in 2012, Forepi will be able to use the cooperation with Mitsui to its advantage in regard to backlight and lighting products.
Genesis Photonics joined forces with JFE Enginnering, targeting at the Japanese market. Although the lighting products merely account 10-15% of the total production at present, the portion is expected to increase in 2012.
Helped by its vertical integration model, Lextar successfully made way into the supply chain of global major makers, which canceled out the slump in the backlight market.
According to Lite-On Technology, the company has signed strategic alliance agreements with six lighting companies and will manufacture LED light source and LED light modules in the future.
According to LEDinside, the value of China’s lighting market will reach US$7.6 billion in 2015. With China’s comprehensive production bases and supply chains, and high domestic demand and market prospects, many manufacturers have been targeting the Chinese market. Epistar cooperates with Sunny Technology Lighting and NVC Lighting, Everlight with Yaming Lighting, and Forepi with NVC Lighting. Philips recently announced that it will set up a LED lighting product plant in Chengdu, which marks Philips’ second large-scale investment in China. Furthermore, LED makers including Liteon and Lextar are taking more aggressive actions to gain a place in the supply chain of global big names. The common goal for the companies is to continue increasing the portion of lighting product in their revenues and preempt an advantageous position in the lighting market.
Taiwan also re-elected its leader Ma Ying-jeou of the Kuomintang (KMT) for a second term this week. Ma is not expected to make any major economic and regulatory reforms, according to the US-Taiwan Business Council. Also read: New installed wafer capacity leader: Taiwan took over in 2011
TRENDFORCE is a global leading research institution providing market intelligence, in-depth analysis reports and consultant services on technology sector. Our company consists of 4 major research divisions: DRAMeXchange, WitsView, LEDinside and EnergyTrend, which cover the DRAM, NAND Flash, PC, display, LED and Green energy research sectors respectively. LEDinside is online at www.LEDinside.com.
Figure. Revenue at the Top 9 Taiwanese LED Manufacturers Fell (9%) Q/Q in 4Q11. SOURCE: Maxim Group Equity Research, January 2012. |