The LED sector is expected to experience a tough year next year in the face of continuously falling product prices, a leading LED entrepreneur said on Saturday.
Lee Biing-jye (李秉傑), chairman of Espistar Corp (晶電), a major local LED component manufacturer, said Chinese LED firms are cutting product prices to boost shipments.
DOWNWARD TREND
Lee said that because of this, the LED sector would face a downward trend in overall product prices at a time when demand for LED components is slowing.
He said he expects the LED business to encounter challenges in the coming year, because even though demand for LED bulbs is on the rise, it is unlikely to help manufacturers fight the challenges of cutthroat price competition.
PICK-UP IN 2014
Lee said the LED sector is expected to generate next year’s sales that will stay at a level similar to this year, adding that a pick-up in sales will not be seen until 2014.
In the first half of this year, Epistar incurred NT$674 million (US$23 million) in net loss, or NT$0.16 per share, compared with NT$1.07 billion in net profit, or NT$1.25 per share, recorded over the same period of last year.
During the six-month period, Epistar posted NT$10.10 billion in sales, down from NT$12.71 billion recorded a year earlier. Last year, the company’s sales stood at NT$22.65 billion.
SHARE SWAP
Meanwhile, Epistar’s directors of board held a meeting on Friday to approve a proposal for the company to acquire Huga Optotech Inc (廣鎵光電), another local LED firm, through a share swap, to expand its production capacity.
On Aug. 9, Epistar announced to raise its holdings in Huga to 100 percent from the existing 48 percent by providing Epistar shareholders 4.85 Huga shares for each of Epistar common share.
Huga will become a fully-owned LED chip unit of Epistar and after that the company will be delisted from the local stock market.
Lee said Epistar is planning to strengthen Huga’s management and improve its production technology and yield rate to boost the company’s bottom line.
EXPECTATIONS
He said that with Epistar presence, Huga is expected to break even in the third quarter of next year. In the first half of this year, Huga incurred about NT$844 million in net loss.
JPMorgan said that due to the acquisition, Epistar will have to shoulder Huga’s losses, adding that as a result, it has lowered its forecast of Epistar’s earnings per share by 30 percent and 24 percent this year and next year, respectively, to NT$0.8 and NT$3.1. For 2014, Epistar’s EPS could stand at NT$4.
RESEARCH NOTE
In a research note, the brokerage said it has also cut a target price on Epistar shares to NT$85 from NT$90.
However, JPMorgan said that it remains positive toward Epistar’s bottom line in the long run and reiterated an “overweight” recommendation on the stock.
Shares of Epistar closed down 0.32 percent at NT$62.60 on the Taiwan Stock Exchange on Friday.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”