Ledlink Optics, a Taiwan-based maker of optical lenses used in LED lighting, is expected to see a gross margin of 45-50% for the second quarter of 2013, lower than the originally expected level of 50%, according to local market analysts.
Ledlink is expected to see consolidated revenues for the second quarter grow about 30% sequentially, but due to the high cost of new molds used to make optical lenses, the company's second-quarter gross margin is estimated to be below 50%, the sources indicated. Demand for new molds is increasing along with growing demand for mid-range and high-end LED lighting products, the sources said.
Ledlink made more than 180 new molds in the first quarter and made significantly more in the second as mold production capacity at its factory in Yangzhou, eastern China, has been expanded, the company said. However, clients have not yet released orders for optical lenses to be produced using the new molds, Ledlink indicated. Ledlink added 20 mold-making machines and 40 plastic injection molding machines at the Yangzhou factory in the second quarter and will add 20 mold-making machines in July, the company noted.
In addition to LED lighting, Ledlink has begun producing optical lenses used in direct-type LED backlight of LCD TVs, with revenues accounting for 5-10% of its total at the end of the second quarter, and shipments are expected to increase in the third, the company said.
Ledlink also started producing high thermal-conductivity plastic modules used to dissipate heat from LED light bulbs in the second quarter, the company said. As the luminous efficiency of LED chips is rising, demand for LED bulb heat dissipation is decreasing, Ledlink indicated. Therefore, high thermal-conductivity plastic modules can replace aluminum-based modules, and they are 20-45% lighter and 10% cheaper to produce, Ledlink noted.
