Wed, Jan 23, 2013 - Page 14 News List

Optoelectronics industry’s output sees yearly decline

HEALING:Despite a fall in production value posted by the sector last year, an industry group said it would start expanding this year amid the global economic recovery

By Kevin Chen  /  Staff reporter

The overall production value of Taiwan’s optoelectronics sector contracted by an annual rate of 5 percent last year, as the European debt crisis negatively affected companies in the LCD, LED backlights and solar power industries, an industry group said yesterday.

The sector’s 5 percent decline in output last year, following a 4 percent increase in 2011, underperformed the annual contraction rate of 1 percent seen by the global optoelectronics market during the same period, the Taipei-based Photonics Industry and Technology Development Association (PIDA, 光電協進會) said in a report.

Last year, total output from local optoelectronics companies –– including Innolux Corp (群創光電) in the flat-panel display industry, Lextar Electronics Corp (隆達電子) in the LED backlight industry and Motech Industries Inc (茂迪) in the solar industry –– were projected to reach NT$2.27 trillion (US$76.3 billion), down from NT$2.38 trillion in 2011.

The industry’s total output value meant that it took almost a 19 percent share of the global optoelectronics market, which according to the report, stood at US$411.8 billion last year.

“This year, the global optoelectronics industry is expected to begin an expansion cycle on the back of an improving global economy and ongoing industry consolidation, as well as new demand driven by emerging markets and new applications,” PIDA said in a statement.

However, the Taipei-based association cautioned that the recovery would be mild and gradual. It said the eurozone debt problem would still affect the global optoelectronics market in the first half of the year, and predicted only a low single-digit percentage growth for this year.

According to the association’s data, the compound annual growth rate (CAGR) in the global optoelectronics sector was about 10.8 percent between 2001 and 2011.

“The global optoelectronics sector is expected to see double-digit growth in production value in 2015,” PIDA said, adding that it is possible to see 10 percent CAGR in the medium term.

Flat-panel displays have led the growth of Taiwan’s optoelectronics industry for the last 10 years. Last year, the flat-panel industry accounted for the biggest chunk (68.76) of overall optoelectronics output, PIDA said.

This year, the LCD industry will focus on the emerging demand for bigger screens used in organic light-emitting diode televisions and the 4K, or “ultra-high definition,” sets, the association said.

However, PIDA said that because of technological problems and low yield rate, Taiwan's Innolux and AU Optronics Corp (友達光電) as well as South Korea's Samsung Electronics Co have recently slowed down their development in the OLED displays, PIDA said.

Instead, these companies are gearing up in the development of the 4K by 2K ultra-high-resolution displays, because such displays which have four times the pixels of today's TV screens pose better market potential ahead, according to the association.

The report also showed that the production value of LED lighting items generated the largest annual growth last year, 137 percent, followed by the solar power industry, which saw a 23 percent increase.

However, companies in the LED lighting industry should strive to diversify their markets rather than focusing solely on China and aim to develop more innovative products to maintain their global competitiveness, PIDA said.

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