Trade Resources Industry Views Demand for LED Chips in The Third Quarter of 2014 Will Significantly Decrease

Demand for LED Chips in The Third Quarter of 2014 Will Significantly Decrease

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As clients are adjusting inventories of LED chips used in backlighting and lighting, demand for LED chips in the third quarter of 2014 will significantly decrease sequentially, according to chairman Lee Biing-jye of Taiwan-based LED epitaxial wafer and chip maker Epistar.

Clients were worried about LED chip shortages and therefore placed orders in excess of actual demand during the first half of 2014, resulting in high inventory levels, Lee said.

Epistar's performances for 2014 may have already seen its peak in July on a monthly basis and in the second quarter on a quarterly basis, Lee noted.

Epistar's shareholders, at an extraordinary meeting on September 1, approved a plan to acquire a 100% stake in fellow maker Formosa Epitaxy through a swap of one Epistar share for 3.448 shares of the latter. Specifically for the acquisition, Epistar will issue 174.612 million new shares, with the stock swap to be finished by the end of 2014.

The acquisition enables Epistar to obtain Formosa Epitaxy's existing production capacity, a way of expanding production capacity faster than setting up a new factory, Lee explained.

Epistar has offered technological assistance to improve Formosa Epitaxy's production efficiency to hike yield rates, Lee said. Epistar has shifted a portion of received orders to Formosa Epitaxy, accounting for 20% of the latter's total revenues, Lee indicated.

Source: http://www.digitimes.com/news/a20140901PD212.html
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LED Demand Turns Weak in 3q14, Says Epistar Chairman
Topics: Lighting