The LED industry is facing over market saturation, but automotive lighting company Laster Tech that was recently listed on the Taiwanese bourse reported strong revenue growth during the first three quarters, a stark contrast in an industry where most companies incurred losses, reported Liberty Times Net.

The company’s profitability was only second that of LED package manufacturer Everlight and lighting manufacturer Tons Lighting, according to Laster Tech more vehicles are making the transition to the spread of LED lights. The company’s projected revenue growth in 2017, and maintaining gross margins at the same levels as 2016.

Founded in 1999, Laster Tech was one of the earliest LED chip and LED component distributors before in-house developing their own automotive light modules. When exterior LED automotive lighting was still uncommon, the company started to enter the related supply chain. Most Taiwanese LED manufacturers have entered the automotive interior lighting supply chain at the time because of its lower entry level and difference in profits. Laster Tech, however, started off in the more technologically challenging exterior lighting, such as taillights, direction lights, headlights, and other niche markets. Hence, gross margins were more stable, and it was more difficult for other companies to clinch orders.

Laster Tech’s main automotive lighting markets include large Chinese automakers, top carmaker Great Wall Motors alone amounted to 40% of the company’s revenue. Another major automotive manufacturer Shanghai Koito Automotive Lamp, is a specialty automotive lighting manufacturer. Laster Tech’s other major clients include Guangzhou Koito and BYD.

More than 90% of Laster Tech’s revenue is from automotive lighting, which is projected to steadily increase over the next few years. Additionally, China slashed purchase taxes of low volume motor vehicles, a policy it extended towards the end of 2016. The company were able to stimulate revenue at the end of third quarter, with its monthly revenue for the past three months soaring at an annual rate of 40% to 80%, and projected to reach new heights in fourth quarter.

In addition to Chinese automotive manufacturers, Laster Tech also acquired Italian automotive lighting manufacturer OLSA and entered Benz automotive supply chain. The company acquired models for three consecutive car models, mainly featuring direction lights, fog lights, and daylight running lamps. It also acquired small volume of headlights, indicating its gradual shift towards high-end market.

Based on estimations, LEDs market penetration in global automotive exterior lighting sector reached about 30% to 40% in 2016. By 2020, the market penetration rate peaked to 60% to 70%, with automotive headlights presenting the greatest growth potential. Automotive lighting’s swap to LED lamps will become a gradual trend that will continue well into 2017 to stimulate further growth next year, moreover the field’s high technology entry level bars competitors from entering this particular market. Although, cutthroat price competition is less intense compared to LED market sector, Laster Tech’s gross margin is maintained at 18%, with further room for increase if it enters the headlight market.