Everlight Electronics Co (億光電子), the nation’s top LED chip packager, expects a price decline in its chip packaging service to decelerate in the second half of this year, supported by rising seasonal demand for TV and PC backlight modules and new client demand, a company executive said yesterday.
Prices are expected to drop by less than 5 percent in the third and fourth quarters, compared with a 10 percent decline in the first half from the prior six months, spokesman Liu Pang-yen (劉邦言) told an investors’ teleconference.
“We have seen an improvement in price competition in the LED market lately,” Liu said.
Stiff price cuts and an increase in lower-margin products drove down its gross margin to 22.01 percent in the first half, from 25.3 percent in the same period last year.
Everlight’s net income plummeted 66 percent to NT$302 million (US$10.07 million), or NT$0.75 per share, compared a with net profit of NT$886 million, or NT$2.12 per share, in the same period last year, according to the company’s financial statement.
Non-operating income shrank about 70 percent to NT$38.27 million in the first half, from NT$126.77 million in the prior year, as it booked a bigger loss from LED chip subsidiary Tekcore Co (泰谷光電) and less gain from Epistar Corp (晶電), according to the statement.
Everlight holds a 5.43 percent stake in Epistar, the nation’s biggest LED chipmaker, and a 9.66 percent share of Tekcore.
However, the third quarter would be a better period than last quarter amid rising seasonal demand for LED backlight modules, Liu said, adding that the rising application of LED screens in handsets, monitors and TVs would give a boost as well.
“Overall, the second half will be better than the first half” in terms of operation, he said.
However, Everlight was conservative about the company’s LED lighting business, as demand weakened amid a prolonged eurozone debt crisis. “The order visibility is low,” Liu said.
LED lighting accounted for 8 percent of Everlight’s total revenues in the first six months. Everlight sells own-brand LED bulbs and lamps and it said it would start taking orders to make LED lighting products for other brands.