Taiwanese LED companies might still face fierce pricing competition from their Chinese peers in the backlight market this year and they must come up with other alternatives to address this challenge, Everlight Electronics Co (億光) said on Tuesday.
The nation’s largest LED chip packaging and lighting product supplier’s answer to this challenge is shifting its product mix toward niche applications with higher margins, while lowering proportions of low-margin backlight and consumer lighting products, Everlight chairman Robert Yeh (葉寅夫) said at a news conference in Taipei.
“The prices of backlight products plunged by 20 to 30 percent last year due to Chinese peers’ price-cutting competition,” the Chinese-language Commercial Times quoted Yeh as saying.
As excessively low prices of some products have left Everlight unable to take orders, Yeh said the company has lowered proportions of its LED backlight and lighting products to less than 10 percent of total sales, while lifting that of infrared LEDs to about 25 percent.
“Infrared LEDs are forecast to show double-digit percentage growth in shipments this year, becoming a major driver of [Everlight’s] earnings this year,” Yeh said.
In addition, the company is scheduled to start shipments of mini-LED products in the second half of this year, he said, adding that, at this stage, the company’s mini-LED products are targeted at backlighting for handsets and automotive displays.
Everlight’s mini-LED chips for dashboard backlighting would be manufactured in small volumes initially, but the potential business opportunity is enormous, he said.
The company’s new plant in Miaoli County’s Tongluo Township (銅鑼), which started commercial operation in 2016, is focused on automotive products with a utilization rate of about 70 to 80 percent, he added.
Last year, Everlight saw revenue drop 6.61 percent year-on-year to NT$27.34 billion, with net income in the first three quarters declining 28 percent to NT$968 million, or NT$2.2 per share.
Business was a slow last year, Yeh said, but added that he aims to see earnings for this year return to 2016’s level.
He did not elaborate on figures, but the company’s financial statement showed that Everlight earned NT$1.81 billion, or NT$4.13 per share, in 2016.
Shares in Everlight yesterday rose 0.44 percent to NT$46 on the Taiwan Stock Exchange.
The stock has retreated 9.09 percent from its most recent high of NT$50.6 on Nov. 8 last year, stock exchange data showed.
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