Thanks to the replenishment demand from brand vendor in 3Q12, the production value for October has shown a respective performance compared to the same period of last year. According to LEDinside, a research division of TrendForce, total revenues for listed LED companies in Taiwan amount to approximately $NT 9.27 billion, a 16.8% growth YoY. With oversupply remaining an issue within the LED industry, many vendors have turned to strategic alliances and share exchanges for the sake of long term development. In the future, the role played by LED manufacturers is likely to expand beyond simply providing chips and components. Many are expected to begin making end products.
Chip Makers Begin Forming Alliances, Seek Long Term Development
The LED chip manufacturers have been facing a sluggish market momentum as well as lowered replenishment demand. The listed Taiwanese chp manufacturer’s revenue remained stable, and reached to NT 3.89 billion (MoM-0.7%, YoY +10.8%) in October 2012. An alliance amongst various manufacturers has been formed due to the price competition and the oversupply situation within the LED chip industry.
With regards to , LEDinside indicated that Formosa Epitaxy Corporation to have a flexible strategy, ; Beginning from Mitsui and FOREPI’s joint venture, Formosa Epitaxy was able to become the OEM for Sharp’s Backlight order as well as receive orders for Japan's lighting market. Through the cross licensing agreement formed with Toyoda Gosei n 2012, the company FOREPI gained access to the overseas market. Through this strategic strategy between FOREPI and Sanan, becoming OEM partnership each other, FOREPI is able to concentrate on products line, and avoid unnecessary price war. There is also a chance to enter into the Chinese lighting supply chain by OEM order.
Aside from Formosa Epitaxy, other chip manufacturers from within Taiwan’s LED industry are seeking their own strategic partnerships. Epistar has used its partnership with Toshiba, along with the cross licensing agreement with the AlGaInP LED patent, using the partnership with Toyoda Gosei as a means to enter into Japan’s LED market and to become an effective vendor. Tekcore, similarly, has officially under the hands of Everlight’s Chairman, Mr. Yeh Yin Fu, and as a result is enjoying stable shipments and revenue.
LEDinside believes that the biggest challenges facing chip manufacturers is that chip prices are dropping at a rate significantly faster than sales volume growth. Although, the LED market performances better in 2012 than in 2011, the rapidly dropping prices is causing revenue to either stay flat or to increase in minor level. In order to maintain decent profits levels, manufacturers plan to release low Vf LED chip products at a better C/P ratio and reliability.
LED Packaged Manufacturers Actively Turning to the Lighting Application Market
For this October, the overall revenue for listed LED Package manufacturers remained stable and reached to NT $ 5.367 billion (MoM +0.42%, YoY+21.7%). With traditional revenue recovery in lamp LED product, , Everlight saw steady shipment orders for Key Pad and Flash lights, and has been able to maintain its utilization rate at around 70% to 80%. Order visibility is about one month, and is likely to stay at the same level as the third quarter. For Lite-on Technology, October revenue for LED components is 6 times larger than it was during the same period of last year, thanks in part to the demand from global branded clients and expansions of the shipments. The LED product revenues, overall, is approximately 40% higher than it was last year.
In the LED backlight application, Lextar is currently getting ready to release its direct-type light bar for 32~40 inch entry TV model and 50~65 inch premium TV model . For lighting applications, other than the steadily rising LED component shipments, LED tube light shipment to the Japanese market has been persisting during October. The LED panel light shipment, on the other hand, has been slightly dropping due to the economic situation in Europe.
