Major Taiwanese LED products suppliers expect an industry turnaround this year, with demand and supply reaching a balance in the second half of the year.
The companies, including Everlight Electronics Co (億光), Epistar Corp (晶電), and Unity Opto Technology Co (東貝光電), are upbeat about the global industry’s prospects, as manufacturers have made an effort to cap production to rein in supply.
Taiwanese LED companies suffered from a global supply glut over the past two years, as Chinese makers expanded production with assistance from the government.
Producers are encouraged now that the Chinese government has shelved its subsidy policy and many countries have imposed bans on incandescent lights while encouraging the adoption of LED lighting because of environmental concerns.
According to recent research reports, annual demand for LED lighting is expected to grow between 50 percent and 100 percent this year.
As the pace of capacity expansion slowed down last year and efforts to develop new technology have helped reduce costs, many loss-incurring Taiwanese LED companies could turn a profit this year, the reports said.
With LED lighting costs falling to levels acceptable to many consumers, Everlight chairman Robert Yeh (葉寅夫) said he expects demand for LED lighting to expand significantly this year.
Yeh predicts that LED lighting would account for more than 30 percent of Everlight’s sales this year, making it the top revenue generator for its LED backlight operations.
Epistar chairman Lee Biing-jye (李秉傑) said the LED industry is on an upturn that is expected to last for at least two years.
Lee said he expects LED lighting demand this year would double from last year.
He expects growth to come from the launch of more 4K ultra-high definition TVs and the adoption of LED components by the auto industry.
LED chipmaker Unity Opto is also optimistic about the industry’s outlook this year, with chairman C.H. Wu (吳慶輝) saying that the company has seen an influx of orders this quarter after a slowdown in the previous quarter.
Wu said Unity Opto would adjust its product portfolio by raising production of high-end chips, which are in short supply.
Lower-end chips continue to be hounded by a supply glut, which weighs on suppliers’ pricing power, he added.
Wu said he expects high-end chips to account for 50 percent of its total sales this year, up from 30 percent last year.