LED package manufacturer Unity Opto revenues is expected to rise in fourth quarter, spurred by the launch of a distribution and OEM deal it sealed with Toshiba in March, reported Liberty Times.

The Taiwanese OEM acquired Toshiba Lighting’s distribution rights in Europe in March this year. In the future, Unity Opto will be manufacturing and selling Toshiba’s LED bulbs in Europe, and after a transition phase of six months, the company will begin shipments in October.

Hence, financial institutes project Unity Opto’s revenues will grow significantly in 4Q15. Taiwanese institutes estimate Unity Opto’s gross margin during fourth quarter will rebound to above 20%, compared to 13% in third quarter this year.

The Taiwanese LED OEM that has largely focused in the LED bulb sector in the last two years was impacted by Philips low priced LED bulb strategies in May 2015. Philips marked down its 60W LED bulb prices in the U.S. market to less than US $2.50 per bulb for a 90 day promotion period. This caused Unity Opto’s gross margin during second quarter to slide to 13.62%, compared to 17% during first quarter.

In response to market developments, the company adjusted its strategy during second quarter. Unity Opto sent one of its low spec and low priced LED bulbs for certification in the U.S. in June, and shipped the products by September.

Additionally, the company added two new clients in North America including Costco, Home Depot and others are outsourcing LED bulb manufacturing to Unity Opto.

Backlight market has also shown signs of life for Unity Opto’s, its Wide Color Gamut (WCG) products have been adopted by Sony and Xiaomi smartphones. In the future, the company plans to also enter other smartphone brand markets. With lighting and backlight market rebounding, financial institutes estimate Unity Opto’s revenue during fourth quarter will increase 20%, while gross margins are expected to climb up to 20%.