Epistar on 21st June announced its financial results, reporting a fully utilized capacity of blue LED as well as a sustained production of AlInGaP LED despite subtle growth in both the output of light sources and the orders for LED backlighting and little possibility to raise prices of its products. The company estimated a 15% QoQ rise that could possibly push up 2Q17’s revenue close to the number in 2Q16. Epistar also expected a decent financial performance in 3Q17 supported by the chip production for LED lighting, AlInGaP LED and infrared LED.
Micro LED has been receiving market attention and attracting loads of investment within the industry. B.J. Lee, Chairman of Epistar, contended that Micro LED, even if it is yet to enter the mass production stage, proved to the public new possibilities for LED innovations. Micro LED is said to offer economical products in the market within five years and Epistar is likely to provide chips as well as wafers. As for MiniLED, Epistar currently holds related technology for applications such as fine-pitch displays and direct-lit HDR TV modules.
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Epistar General Manager Chou Ming-chun also stressed that Epistar is capable of supplying RGB LEDs and will definitely benefit from Micro LED once the technology takes hold. However, it was still too early to confirm which companies will contribute to the manufacture process at this stage as the supply chain is yet to be fully developed. In the future, Micro LED will be firstly used in applications such as wearable devices or large-sized TVs. It is able to see a drastic market growth if Micro LED can be introduced to smartphones.
The 2H17 financial prospect showed, according to Epistar’s Chou, 60% of the company’s supply will be for LED lighting, 30% for backlighting and the rest for others including chip scale packages (CSPs) and flip chips. In terms of application,chip demands for horticultural lighting and infrared LED in 2017 appeared to be sustained and could even help drive up earnings in 3Q17. In addition, the chip demand for CSP LED in 3Q17 will also turn strong and the supply is expected to double the amount in 3Q16. It is reported to be mainly applied in TV backlighting.
Chairman Lee marked that the world LED market saw a tightened supply in 1H17. Anticipation for 3Q17’s market dynamic continued to rise. As it enters the peak season of LED backlighting and the introduction of HDR technology to high-end LCD products starts, the LED consumption will rise. Meanwhile, the trend to thin and lighten TVs will increase the demand for CSP LEDs. Epistar’s CSP shipment in 3Q17 will surge to a total sum of 40-50 million chips, several times more than the quantity of 10-20 million in 3Q16. The number of orders for horticultural lighting will go up and the capacity of AlInGaP LED is expected to be fully used. Thanks to the great number of orders, the utilization rate of Epistar’s plants has no problems to remain high until July and August.
Epistar’s 1Q17 Revenue stood at around NTD 5.734 billion (USD 188.4 million), with quarterly and annual decline of 9.5% and 5.33% respectively. Its gross margin has marked a new high over the the past ten quarters at 19.7%. Despite an operating income of NTD 417 million (USD 13.7 million), the chip maker reported a NTD 280 million (USD 9.2 million) net loss after tax due to an exchange loss of up to NTD 600 million (USD 19.7 million), leading to a drop of NTD 0.26 in its ESP.
After a mild revenue slide in April, the revenue in May rose by 1.18% MoM (2.67% YoY) at NTD 2.214 billion (USD 72.7 million). The consolidated revenue until May experienced a 3.51% YoY slump, amounting at NTD 10.13 billion (USD 333.1 million). Expecting a stable performance in June, Epistar projected a surge over 10% QoQ in 2Q17’s revenue which possibly plateaus, compared with that in 2Q16.
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