Epistar Chairman Dr. B.J. Lee remained conservative about LED industry’s 4Q13 performance prospects, during an interview at LEDforum Taipei 2013. Lee was the second opening remarks speaker at the two day event in Evergreen International Convention Center organized by LEDinside, a LED research subsidiary of Trendforce.

The conservative forecast is largely based on the LED industry’s typically low 4Q season, said Lee. Although backlight demands are slightly rebounding, LED lighting industry will face industrial cycle readjustments by 4Q, due to growing LED lighting demands over the last few years and product shipment volume. Lee projected 4Q operations will decrease 15% compared to 3Q.

TrendForce Chairman Dr. C.L Liu (left) and Epistar Chairman Dr. B.J. Lee (right) at LEDforum Taipei 2013. (LEDinside)

From past LED industry cycles, 2Q and 3Q are traditional peak seasons, while 1Q and 4Q are usually low seasons, explained Lee. Total revenue from 2Q to 3Q peak seasons on average total 60 percent, while 1Q and 4Q revenues account for about 40 percent, said Lee. Looking at revenues from past seasons, 4Q revenues on average are 15 to 20 percent lower than 3Q.

Observations of 4Q13 LED market show, LED TV backlight stock up demands have not emerged for the China’s National Day Week in early October. However, from the client end the Chinese government’s plans of launching new energy-saving subsidiary policies has contributed to signs of rebound in the LED backlight market. In comparison, LED lighting demands usually emerge after Christmas season. U.S. and European markets usually do not have lamp replacement demands, and product shipments are usually concentrated in 3Q. Shipments are usually finished during Oct. to Nov., hence the overall LED lighting market demand is in decline, and will be overall larger than rebounds in LED backlight.

LED Industry Supply and Demand to Reach Equilibrium by the End of 2014

However, Lee was optimistic that the LED market demand and supply will reach equilibrium by the end of 2014. As LED lighting market demands quickly grow, the oversupply situation in 2014 should gradually ease. Lee estimated LED die supply and demand will reach an equilibrium by 2014, or end of 2014 earliest. 

From a production value perspective, LED backlight for TV and laptop applications has a 35% market share, while LED lighting markets is 25%, said Lee. It is estimated LED lighting shipment volumes will grow exponentially next year. As product price slides, LED lighting market value has a chance to catch up with LED backlight at the end of 2014.