Starting September 2012, demand for AlGaInP LED has been weakening, according to LED chipmaker Epistar. Nevertheless, the firm added, demand for backlight applications is still strong, hence if sales during China's October 1 holidays increase significantly, inventory levels will decrease and the fourth quarter will be better than expected.
Accumulated revenues from July-August were NT$3.386 billion (US$115 million), according to Epistar. Market observers believe Epistar's September revenues should be at the level of NT$1.7 billion.
Epistar said it will run at continuous full capacity in September and has been seeing strong demand of backlight applications for large-size TVs and monitors.
Formosa Epitaxy, another LED chipmaker, expects overall revenues in the third quarter to be better than the second quarter. The firm has been seeing strong orders and expects this to continue to November. Everlight, a Taiwan-based LED packaging house, indicated order visibility is clear for October.
Industry sources pointed out that China's policy of providing subsidies for customers to procure LED and energy-saving home appliances is the key to the recent rise in demand. The subsidy will last for a year and end in May 2013.
