Trade Resources Industry Trends China LED Industries See Rising Sales But Profitability Has Been Decreasing in 2012

China LED Industries See Rising Sales But Profitability Has Been Decreasing in 2012

Taiwan,China LED industries facing shuffle,says Epistar chairman Siu Han,Taipei;Jackie Chang,DIGITIMES[Monday 1 October 2012]The LED industry has been seeing rising sales but profitability has been decreasing in 2012.Biing-Jye Lee,chairman of Taiwan-based LED chipmaker Epistar,noted that total revenue growth in 2013 for the LED industry may only be around 5%.Taiwan-based LED firms have been facing rising competition from China-based peers,however,as China's LED subsidies will come to an end in 2014,the LED industry will face turbulence as the number of LED firms decreases to five,added Lee.

The competition between Taiwan-and China-based LED firms has been interesting,said Lee,as the former owns advanced technology and the latter has access to a big market.If Taiwan-and China-based LED firms can cooperate in the international LED lighting market,the alliance will be influential and meaningful,said Lee.

The LED industry has been in oversupply due to aggressive capacity expansion by China-based LED firms,Lee pointed out.China-based LED firms have been subsidized by the government on equipment procurement and plant construction,and the subsidies allow the firms to obtain orders using quotes that are close to costs,making it hard for Taiwan-based firms to compete.Gross margin is unlikely to improve in 2014,said Lee,because the price of LED chips has been falling continuously in recent years.Nevertheless,Lee believes the price fall of LED chips to be less than 20%in 2013.

Taiwan-based LED firms are not the only ones to feel pressure from the oversupply.According to Lee,China's LED industry has been going through a shuffle and around 10 LED epitaxial wafer firms have been asked to merge.Hence,Lee predicts that by 2015,after the LED subsidies have ended,there will only be five large-size LED firms left in China.

Lee predicts the LED lighting market will show significant growth in 2014 due to the US ban on 25W incandescent light bulbs.

 

Source: http://www.digitimes.com/news/a20121001PD202.html
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Taiwan, China LED Industries Facing Shuffle, Says Epistar Chairman
Topics: Lighting