LED Execs Predict Upbeat 2014 Market Amid Surging Orders to Taiwan's LED Makers

While the top executives of world's five leading LED makers recently issued upbeat market forecast for 2014, several Taiwanese manufacturers in this line  landed rush orders that will keep production humming throughout the first quarter of 2014.

B.J. Lee, chairman of chipmaker Epistar Corp., predicts supply-demand balance of the global LED market to arrive earlier than expected in 2014 in light of surging orders to his company since late 2013 and profit growth to be realized in 2015 for most of the island's LED makers, contrasting his original cautiousness. His company is the world's No.1 producer of blue chips by volume.

Everlight Electronic Co., Ltd. Chairman Robert Yeh, whose company is the world's No.1 LED packager by volume, felt that the company's revenue from lighting products will for the first time exceed that from  LED backlight products in 2014 citing surging demand for LED lighting and increasingly  affordable prices of LED lamps.

Lee Soo Ghee, managing director of Cree Hong Kong Ltd., pointed out that extensive application of LED lighting and massive size of the lighting market simply defy comparison to any other LED application.

Formosa Epitaxy Inc. Chairman Frank Jien said there would be no low season throughout 2014 with 2013 being the bottom for his company.

Industry executives say that after several years of operational loss due to  China's government subsidies for domestic LED makers, Taiwan's LED industry will begin to emerge from loss in 2014 because of increasing bans on incandescent bulbs in major economies and hiatus of said subsidies.

They added that countries with incandescent phase-out plans are beginning to rid of 40W and 60W incandescent bulbs, hence boosting uses of LED lamps, whose popularity is also driven by surging energy prices and declining LED prices.

With 84 to 128 LEDs integrated into a four-inch light tube, industry executives estimate eight billion to 12 billion of LEDs will be needed a year for 100 million such tubes, which  may largely ease overcapacity.

Epiled Corp., a leading LED chipmaker in Taiwan of high-power chips and red chips for lighting applications, added two more metal organic chemical vapor deposition (MOCVD) chambers in late 2013 to its operating 15 chambers to keep up with growing demand in China.

According to market consultant LEDinside, the LED lighting industry will generate an estimated US$17.8 billion of revenue worldwide in 2014 with shipments of 1.32 billion lights, up 68% from 2013. China alone will see demand rise 86% year on year in 2014.

Epiled topped its Taiwanese industry peers in the first three quarters of 2013 in profitability, earning NT$0.4 per share in after-tax net income, with consolidated revenue of NT$977 million (US$32.5 million).

Industry executives estimate the company's earnings for 2014 to likely double year on year based on brisk market for LED lighting and added MOCVDs.

Taiwan's LED makers are also receiving ample orders for LED backlights for TVs. Epistar, FOREPI, Unity Opto Technology Co., Ltd., and Lextar Electronics Corp. have recently landed rush orders from TV makers. FOREPI and Unity Opto believe their revenue for the first quarter of 2014 will grow from the fourth quarter of 2013.

Unity Opto executives pointed out that the company began in the fourth quarter of 2013 providing TV customers with LED packaging solutions featuring high luminous efficacy and high color rendering, estimating the company to win more share in LED backlight market due to such solutions and ultra-thin backlight designs.

According to industry executives, TV maker Sharp rolled out a unique backlight technology that adopts Taiwan-made high-brightness, high-efficiency LEDs, and high CRI phosphor, which boost color saturation to over 90% from 65-70%. Sharp plans to double the orders in the second quarter of 2014. (KL)

Industry Executives' Opinion on 2014 LED Market

Stock code	Company	Executive	Comment
2393	Everlight	Chairman Robert Yeh	LED lighting market will grow sharply
2448	Epistar	Chairman B.J. Lee	Optimistic
2499	Unity	Chairman Alpha Wu	The year to see market upturn
3061	FOREPI	Chairman Frank Jien	A year without low seasons
4969	TERA XTAL	Chairperson L.L. Guo	Excessive demands for sapphire in Q1

Sources: the companies