Local manufacturers in the LED sector saw a fall in revenue for the third quarter amid slowing demand for television backlights, market analysts said yesterday. Everlight Electronics Co (億光) was one of the few companies in the sector that posted revenue growth in that quarter.
Demand for TV LED backlights dropped as sales in the huge China market slowed down after May 31, when a one-year subsidy program for energy efficient home appliances ended.
Although many manufacturers in the sector have shifted part of their production lines from backlights to LED lighting, they have not been able to buffer the effects of a slower TV market in China, analysts said.
Due to the drop in demand from China, the LED sector in Taiwan failed to see revenue rise during the peak season last quarter. For the seasonally slow period this quarter, Taiwan LED companies might see their sales trending down sequentially, Credit Suisse Securities said in a client note.
Epistar Corp (晶電), one of Taiwan’s largest LED chip suppliers, recorded a quarterly 5.3 percent drop in consolidated sales to NT$5.75 billion (US$195 million) in the third quarter. However, the figure was 1.43 percent higher year-on-year.
Last month alone, Epistar’s consolidated sales fell 5.4 percent from a month earlier to NT$1.87 billion after a drop in shipments to the China market, but the figure was 3.23 percent higher than in the same month of last year.
LED packaging and testing services provider Unity Opto Technology Co (東貝) said its third-quarter sales were hurt by inventory adjustments in the Chinese TV market.
In the July-to-September quarter, Unity Opto posted NT$1.68 billion in consolidated sales, down 16.16 percent from the second quarter. Last month’s revenue fell about 7 percent from a month earlier to NT$513 million.
Formosa Epitaxy Inc (璨圓) said its consolidated sales fell 30.84 percent to NT$292 million last month from August, the second lowest level this year.
Its third-quarter sales dropped 22.1 percent from the previous quarter to NT$1.13 billion, it said.
Analysts said that Formosa Epitaxy sales growth shrank despite its close business links with Chinese partners such as TV brand TCL Corp and packaging and testing service provider Shenzhen Redfond Optoelectronics Co (瑞豐).
Bucking the trend, Everlight posted NT$7.01 billion in consolidated sales for the third quarter, up by a quarterly 17.42 percent, as its shipments of LED components to smartphone, tablet and monitor vendors grew during that period. Last month’s sales rose slightly to NT$2.412 billion from NT$2.41 billion in August.
Everlight has established an LED lighting brand, which has helped the company gain a higher share of the global market. In August it started booking sales from its German subsidiary, WOFI Leuchten.
In the first nine months of this year, Everlight’s sales rose 28.18 percent from a year earlier to NT$17.93 billion, setting the company apart from other businesses in the local LED sector.
Third quarter results
‧ Epistar recorded a 5.3 percent drop in sales to NT$5.75 billion.
‧ Unity Opto posted a 16.16 percent fall in sales to NT$1.68 billion.
‧ Formosa Epitaxy said sales dropped 22.1 percent to NT$1.13 billion.
‧ Everlight reported a 17.42 percent increase in sales to NT$7.01 billion.