It’s reported that the global LED output is expected to grow by only 5 percent next year, given the impact of the global economic downturn. While Taiwan, which accounts for 20 percent of the world’s LED output, is projected to fare slightly better with a 7 percent increase, according to an analyst with the Industrial Economics and Knowledge Center (IEK) under the Industrial Technology Research Institute (ITRI).

Recently, the center’s projection came, because Taiwanese LED makers including Opto Tech Corp, Tyntek Corp and Bright LED Electronics Corp saw their share prices close limit-down for the second straight day. Share prices of the big two LED makers, Everlight Electronic Co and Epistar Corp, have plummeted by 66.5 percent and 71.52 percent respectively from May 20 until yesterday. Everlight Electronic’s shares fell 0.72 percent to NT$41.55 on the Taiwan Stock Exchange yesterday. Epistar’s shares were down 5.56 percent to NT$28.05.

Allen Lin, an analyst from Hsinchu-based IEK, expected the global LED market to grow by only 5 percent to around US$7.4 billion next year, given the impact of the global economic downturn. He said Hi-bright LED, driven by demand in emerging markets, will become the major driving force of the LED market. He also expected the hi-bright market to increase by 9 percent next year to reach US$5.5 billion.

He noted as the company expansion this year raises the odds of a price drop, normal-bright LED is likely to face a slowdown. Taiwan’s LED output value is estimated to climb 13 percent this year from a year earlier, to reach US$1.84 billion. But the level of growth differs between upstream and downstream sectors. Upstream LED chip makers’ expansion of production capacity this year has led to a significant drop in unit price and caused output value to grow by only 8 percent.

In contrast, thanks to the increased application of hi-bright LED products, downstream LED packaging firms’ output value is projected to grow by 14 percent, he added. As the global economic outlook remains unclear, Taiwan’s LED output value may only see a modest growth of 7 percent to NT$65.4 billion next year, he estimated.

Despite the fact that output value is still showing positive growth, Lin warned that the average selling price was likely to fall by more than 25 percent for the whole year, as profit margins are being hurt by weakening demand. However, the prospects of the LED industry still look quite positive in the long-run, he noted.