Epistar Corp (晶元光電), the nation’s biggest LED chipmaker, yesterday voiced optimism over the next quarter’s prospects, citing growing demand for chips used in new applications such as LED TVs.
To meet rising customer demand, Epistar plans to expand capacity by between 5 percent and 10 percent this year, with production ramping up before the end of the year, chairman Lee Biing-jye (李秉傑) told reporters on the sidelines of a seminar on cross-strait cooperation in the light-emitting diode (LED) industry.
Epistar’s factory utilization is approaching 100 percent as supply and demand reached parity earlier this year amid an increasing number of applications for LED backlight in notebook computers, netbooks and flat-panel TVs.
“The third quarter looks quite good,” Lee said.
Demand has rebounded over the past three months from March, driven by inventory restocking.
“New demand for LED TVs, netbooks and general lighting is growing faster than we expected. That will make the shortage [of LED chips] worse through the rest of the year as there will be limited new capacity coming out,” Lee said.
Epistar and its local peers have been ramping up production since March or April, but supply is expected to remain limited as it usually takes nine months to 10 months for chipmakers to ship the first batch of chips, Lee said.
He also forecast limited upside in revenues in the coming months, citing capacity limitations and little chance of a price hike.
Lee said the firm was concerned about potential double booking by customers amid the shortage and risks of a downward adjustment in the outlook for netbook computers and mobile phones, the main consumers of LED.
While orders have recovered, customers are not placing orders as aggressively as during the industry peak, Lee said.
He voiced optimism that order visibility could clear up later this month.
Epistar posted losses of NT$107 million (US$3.3 million) — its second straight quarterly losses — compared with a net income of NT$154 million in the same period last year.
The two-day seminar on deepening cooperation between Taiwanese and Chinese LED companies could bring more business opportunities for local firms as Beijing pushes more green energy policies, including replacing fluorescent street lamps with LED lamps, said Johnsee Lee (李鍾熙), president of event co-organizer Industrial Technology Research Institute (工研院).
“We aim to help local LED firms get easier access to China’s LED market, which is expected to spend NT$70 billion on its program to replace fluorescent street lamps in more than 20 cities in China over the next three years,” Lee said.
More than 80 Chinese industry heavyweights and government officials, including Feng Jichun (馮記春), director-general of China’s Ministry of Science and Technology, are attending the seminar, which ends today.
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