Epistar Corp (晶電), the nation’s leading LED chipmaker, expects its operations this quarter to significantly outgrow performance in the same quarter over the past few years, supported by its backlight units and four-elements products, a company executive said yesterday.
“The fourth quarter is usually a slow season for the LED chips industry, but our business this quarter exceeds the company’s forecast,” Epistar spokesperson Rider Chang (張世賢) told the Taipei Times by telephone.
However, Chang declined to offer a range of revenues forecast for this quarter.
BETTER THAN EXPECTED
Chang said orders for Epistar’s blue/white light LED products — which accounted for between 70 percent and 75 percent of the firm’s total revenues of NT$6.59 billion (US$206.43 million) last quarter — were better than expected.
Those products are part of the backlight units used in TVs.
Orders for LED flashes for smartphones have weakened from last quarter due to seasonality, but they still represented growth from the same time last year, Chang said.
AT FULL CAPACITY
Chang said the four-elements items, which contributed between 25 and 30 percent to Epistar’s revenue last quarter, is at full capacity in production this quarter.
Epistar’s four-elements products, which have higher average selling prices and margins, include automotive brake lights, directional lights, infrared applications and red LEDs used in indoor and outdoor advertising billboards, Chang said.
IMPORTANT DRIVERS
The company’s four-elements products pose an important driver for Epistar’s operations this year and help offset the impact of the excessive supply of blue/white LED chips in the international industry.
Epistar is restructuring the company’s operations this year, including a freeze of 25 percent of its total production capacity in March.
Since then, the company has allocated more capacity for four-elements goods to replace lower-margin products.
Epistar said its efforts have paid off, reporting a net income of NT$3.05 million last quarter, ending five consecutive quarters of net losses.
PRODUCT PORTFOLIO
Hong Kong-based brokerage CLSA on Nov. 7 forecast Epistar’s revenues would drop by 4 percent quarterly to NT$6.31 billion this quarter, while Macquarie Research on Nov. 8 estimated that Epistar’s revenues would drop slightly by 2.73 percent quarterly to NT$6.41 billion from the prior quarter.
However, CLSA said it estimates Epistar’s gross margin could improve by 1.2 percentage points to 14.4 this quarter, on the back of a better product portfolio due to the increasing contribution from the higher-margin of four-elements products.
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