Weak demand is said to have caused Taiwan-based LED firms to consider reducing their workforces. Huga Optotech, Lextar and Everlight are reportedly considering cutting staff.
Taiwan-based firms have been seeing disappointing capacity utilization rates, rising competition from China-based makers and falling demand. Huga re-introduced non-paid leave in 2011, and closed part of its plant in Taichung, Taiwan in the second-half of 2011. The firm also laid off 200 employees in 2011. To reduce investment losses, Epistar acquired Huga, and in September 2012 laid off 62 employees.
According to Huga, the recent workforce reductions are coming to an end. The firm added that after the acquisition, resources will be integrated and operating costs will be reduced.
Huga noted that due to OEM orders from Epistar, the firm has been seeing the capacity utilization rate of its front-end epitaxial crystal division rising to around 80%. However, back-end capacity utilization continues to be around 50%.
The two LED subsidiaries of AU Optronics, Lextar and Wellypower, announced a merger in September. The actual merger date has been set for February 1, 2013. According to David Su, chairman of Lextar, after the merger, some adjustments will be made to staff in overlapping departments to maximize the effect of the merger. The latest rumors in the market state that Lextar will cut a large number of staff. Lextar refuted the rumors by stating there are no plans to cut a large number of staff, the firm is only adjusting its workforce.
Rumors in the market also state that LED packaging house Everlight is likely to cut staff despite the fact that Robert Yeh, chairman of the firm, believes fourth quarter performance will be healthy.
