In the second quarter of next year the FIFA World Cup Brazil will feature top grade LED displays in 14 playing venues. With LED display panel driver IC demand starting to emerge, Macroblock chairman Dr. Li-Chang Yang expressed that the company has been receiving an influx of customer orders and the increased output volume has become one of the divers for operation in the second half of the year.
The competition within the LED driver IC market is fierce. Dr. Li-Chang Yang stressed that in facing the pressures of price cutting, the company aggressively increases the added value of their products by launching LED driver IC equipped with controller capabilities and continuously accelerating high PWM (pulse width modulation) wafer output volume. Currently there has been a total shift towards 3.5 micrometer (µm) manufacturing and specialized packaging technology, both of which have low costs. Future profit margins strive to maintain a standard of 33 percent.
After providing a hefty number of LED driver ICs for the London Olympics last year, the company will also be responsible for equipping 14 playing venues with top grade LED displays. Completion of the installation is expected by next year 1Q. The company currently has consumers placing orders and shipments will peak in 4Q13. It is expected that support for the entire operation will experience a slack season.
Macroblock emphasizes that despite the short duration of the competitions, Macroblock will delivery entirely PWM capable wafers for the World Cup. The company wants to exhibit the high quality performance of the product to entice consumers to increase their standards when shopping, as well as diversify market competition.
For the first half of the year, high end wafers accounted for 20 percent of Macroblock's total deliveries. Due to price being twice the norm and exceptional gross profit, consumers outside of China no longer deliver standard wafers. It is predicated that after World Cup Brazil, high end wafer delivery proportions will have an expected increase to 40 percent which will lead to more competitive price-cutting on the market.
