Taiwan-based LED chipmakers have been trying to return to profitability but due to continuous price falls, it has been difficult. Market observers believe LED chipmakers such as Epistar, and Formosa Epitaxy will see net losses in 2012.
The fourth quarter is the traditional low season and LED chipmakers have been reporting falling sales. Market observers believe that since revenues and capacity utilization rate are falling, LED firms are likely to continue seeing losses. Furthermore, due to an imbalance in supply and demand, output value growth in 2013 is likely to be lower compared to growth in previous years.
Epistar reported third-quarter 2012 revenues of around NT$5 billion (US$172 million), representing an on-quarter growth of 2%. Third-quarter 2012 gross margin was 20%, but severe losses from investments, reaching NT$300 million, caused third-quarter EPS to be only NT$0.15. Accumulated EPS for the first three quarters of 2012 is negative NT$0.01.
Market observers stated that due to losses from investing in firms like Huga Optotech and Tekcore, Epistar is likely to see fourth-quarter revenues fall 10% on quarter. Total revenues are likely to reach NT$18 billion, but Epistar has a small chance of returning to profitability in 2012, said market observers.
Formosa Epitaxy showed improvement in sales in the third quarter due to demand growth for TV backlights. Nevertheless, November revenues showed a 22% decrease on month. Even if December sales are steady, total sales in the fourth quarter are likely to show a sequential decrease, stated market observers.
