The production value of Taiwan’s LED component sector fell sharply in the first half of this year, reflecting a falling global demand for a wide range of electronic devices such as notebooks and TVs, market statistics showed on Saturday.
Citing the data, the Photonics Technology & Industry Development Association (PIDA, 光電協進會) said that output of Taiwan’s LED component industry, including LED chips and epitaxy, totaled about NT$19.8 billion (US$603 million), down almost 20 percent from a year earlier.
The PIDA said that in order to grasp a higher share, many LED lighting suppliers around the world are engaged in a price competition, and the weakening pricing power of LED chip makers has imposed further adverse effect on the LED component industry, sending the sector’s production value even lower.
Falling demand for TVs and computer monitors in the global market affected LED lighting sales in particular, but also dragged down production value in the local LED component industry, the PIDA said.
In the first half of this year, the top 10 LED chip suppliers in Taiwan suffered a 9 percent year-on-year decline in sales as a whole, while incurring a loss of NT$1.13 billion during the same period, marking a reversal from a profit of NT$89 million seen over the same period of last year, the association said.
According to the PIDA, the latest output data show that Epistar Corp’s (晶元光電) acquisition of a smaller rival, Formosa Epitaxy Inc (璨圓光電), has not created as much energy synergy as the market had previously expected. Epistar, the largest LED chip maker in Taiwan, also fell victim to the global weakness.
Last year, Epistar announced a deal to acquire Formosa Epitaxy through a stock swap in which Epistar would exchange one of its common shares for 3.448 Formosa Epitaxy shares to boost the suitor’s competitive edge in the global market.
The PIDA said that the local LED packaging and testing business appeared resilient compared with the LED chip sector, adding that output of the LED packaging and testing services providers totaled NT$44.9 billion in the first half of the year, down slightly from a year earlier. The association did not provide a year-on-year comparison.
The PIDA said that sales of LED products this year in almost all of the markets in the world are expected to fall between 10 percent and 20 percent from a year earlier, while China could be the only market that could maintain growth pace similar to last year’s.
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