Taiwan LED wafer manufacturer Epistar announced more good news for its market layout in LED lighting. According to a report by global financial service firm Morgan and Stanley, Epistar's infiltration into CREE's supply chain, controlling production of high efficiency red LED chips and mid-to-low watt sapphire wafer orders, lighting proportion within the company will continue to rise for 4Q.
LED industry 3Q results were affected by a decrease in TV backlight demands. Peak season has also felt the effects. Morgan and Stanley pointed out that Epistar's latest announcement has drawn in an increasing number of orders by larger international manufacturers. In July, Epistar obtained OEM orders for CREE mid-to-low watt sapphire wafers and deliveries are estimated to begin this September. In addition, Epistar acting as an OEM manufacturer for CREE red 2v chips demonstrated the company's superiority in cost and mass production. It is predicted that light manufacturing proportion for Epistar in 4Q will continue rising.
Morgan and Stanley have a positive outlook for Epistar;s new TV backlight product development pointing out the company's ever increasing wafer technology. Large Korean companies have already authorized chip scale packaging production operations in July and will begin small scale shipments in September. The chip scale packaging launched by Epistar lead to LED cost in backlight modules to drop 20-30 percent. Morgan and Stanley predict that new TV models will adopt this technology by 2014, benefitting Epistar.
For operations performance, Epistar predicts that September will have a slight shift to 95 percent, higher than the previous 90 percent. Morgan and Stanley estimate that revenue for the second half of the year for Epistar will grow 12 percent compared to that of the first half. 3Q revenue will drop 2 percent compared to 2Q and 4Q revenue is hope to have a slight increase of 3 percent compared with 3Q.
