Epistar has received orders from Japanese automobile manufacturers making it the first Taiwanese chip maker to enter into the automotive industry. The company plans to begin shipments at the beginning of next year. They have also received qualifications by the Korean manufacturers Samsung and LG for TV chips which will also begin shipment 1Q of next year.

Receiving orders from Japanese automotive makers for their LED auto brake/directional lighting, Epistar will begin to fixate primarily on the Asian LED market, especially Japan. With steady growth in the LED lighting market, Epistar is focusing most of its energy in price-cutting competition. Increased profit in automobile lighting and long product life cycle, the company hopes to go through its downstream lighting modules, midstream packaging, and upstream die manufactures in order to enter into the new niche market. According to Primasia market reports, automobile lighting gross profits had an increase of 40 percent or higher, with Epistar and Everylight only increasing by 15 percent in total gross profit for 2Q13.  

LED industry insiders pointed out that automotive lights coupled with LED chips only make up a slight fraction of the entire automotive cost. For one set of backlights using around 30-40 die, the price difference between Phillips and Epistar is not even NT$200 (US $6.6). International automobile manufacturers are willing to risk changing their supply chain in order to save a few dollars. This is how Epistar was able to enter into the automotive market.  

3Q numbers are expected to dip due to backlight demands decreasing after peak period. Morgan Stanley forecasts a 3 percent drop in revenue for 3Q with total revenue increasing to 40 percent for the second half of the year (30 percent in first half of the year). Profitability has hope for gradual improvement with subsidy Huga Optotech breaking even last quarter and customer decentralization. 3Q gross profit margin is estimated to reach 18 percent but drop to 15 percent for 4Q.