The value of global light-emitting-diode (LED) output is expected to grow by only 5 percent next year amid a weak economic environment, while Taiwan, which accounts for 20 percent of the world’s LED output, is projected to fare slightly better with a 7 percent increase, an analyst with the Industrial Economics and Knowledge Center (IEK) under the Industrial Technology Research Institute (ITRI, 工研院) said. LACKLUSTER
The center’s projection came amid the recent lackluster performance of LED stocks on the local bourse, as Taiwanese LED makers including Opto Tech Corp (Optotech, 光磊科技), Tyntek Corp (鼎元光電) and Bright LED Electronics Corp (佰鴻) saw their share prices close limit-down for the second straight day yesterday.
Share prices of the big two LED makers, Everlight Electronic Co (億光電子) and Epistar Corp (晶元光電), have plummeted by 66.5 percent and 71.52 percent respectively from May 20 until yesterday.
Everlight Electronic’s shares fell 0.72 percent to NT$41.55 on the Taiwan Stock Exchange yesterday. Epistar’s shares were down 5.56 percent to NT$28.05.
Allen Lin (林志勳), an analyst at Hsinchu-based IEK, said he expected the global LED market to grow by only 5 percent to around US$7.4 billion next year, given the impact of the global economic downturn.
Hi-bright LED, driven by demand in emerging markets, will become the major driving force of the LED market, Lin said.
He also said that he expected the hi-bright market to increase by 9 percent next year to reach US$5.5 billion.
Normal-bright LED is likely to face a slowdown, as the company expansion this year raises the odds of a price drop, he said.
Taiwan’s LED output value is estimated to climb 13 percent this year from a year earlier, to reach NT$60.9 billion (US$1.84 billion). But the level of growth differs between upstream and downstream sectors.
Upstream LED chip makers’ expansion of production capacity this year has led to a significant drop in unit price and caused output value to grow by only 8 percent.
In contrast, thanks to the increased application of hi-bright LED products, downstream LED packaging firms’ output value is projected to grow by 14 percent, Lin said.
As the global economic outlook remains unclear, Lin estimated that Taiwan’s LED output value may only see a modest growth of 7 percent to NT$65.4 billion next year.
Despite the fact that output value is still showing positive growth, Lin warned that the average selling price was likely to fall by more than 25 percent for the whole year, as profit margins are being hurt by weakening demand.
However, the prospects of the LED industry still look quite positive in the long-run, Lin said.
STAYING AHEAD: Fitch said that TSMC remains technologically ahead of others, but Samsung is building a new chip fab, while China is investing in its domestic industry As escalating US-China tensions and COVID-19-related production disruptions force US technology supply chains to transform, Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$12 billion chip fabrication plant in Arizona would be key to spurring greater US production of core semiconductor components, Fitch Ratings said. “We view the US-TSMC alliance as a first step in building a more autonomous US technology supply chain, given high barriers to entry, specifically related to the significant capital and design capability required for leading-edge semiconductor manufacturing,” Fitch said in a statement on Tuesday. “By working with TSMC, US chipmakers will not face the financial burden of incremental investment
DIVERSIFICATION: Although COVID-19 would push more companies to produce in emerging markets, DBS said that it was unlikely that firms would totally leave China Geopolitical tensions and supply disruptions are expected to accelerate the migration of manufacturing out of China, as concerns about the risk of production concentrated in one country increase, S&P Global Ratings said. Although its economic expansion might be weaker than previous levels due to the accelerated relocation of manufacturing, China’s economic growth would still be stronger than that of most other economies, the ratings agency said. “While absolute growth rates will moderate, we believe China’s economic performance will continue to be a key sovereign credit support,” S&P Global Ratings credit analyst Tan Kim Eng (陳錦榮) said in a statement on Thursday. “Its growth
Taiwan’s corporate landscape has changed significantly over the past 20 years, with Hon Hai Precision Industry Co (鴻海精密) replacing Formosa Plastics Corp (台塑) as the revenue leader, while Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) has emerged as the most profitable firm, a survey of Taiwan’s 50 largest companies published on Tuesday last week showed. The Chinese-language CommonWealth Magazine survey ranked Taiwan’s 50 largest companies based on their revenue last year, and compared them with the results of a similar survey it conducted in 2000. Only 33 companies on the original list remained in this year’s rankings, the survey found, following two
GEOPOLITICAL RISKS: Beijing announced plans to strengthen ‘enforcement’ in Hong Kong, sparking losses across Asia led by the Hang Seng’s 5.6 percent plunge Local shares on Friday ended sharply lower amid renewed tensions between the US and China over Chinese telecommunications equipment giant Huawei Technologies Co Ltd (華為) and China’s plan to introduce a national security law in Hong Kong. The TAIEX on Friday finished down 197.16, or 1.79 percent, at 10,811.15 on turnover of NT$177.183 billion (US$5.9 billion), almost flat from a close of 10,814.92 on May 15. The market was down across all major sectors, in particular electronics shares, which finished down 1.99 percent from Thursday’s close. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest wafer foundry and a chip supplier