Traditional Slack Season Coupled with Weaker Demand for LED Backlit TV During China's National Day Holiday, Taiwanese LED Manufacturers' Revenue of October Dropped by 10% Based on the analysis and statistics of LEDinside, a research division under TrendForce, in October 2010, listed LED manufacturers in Taiwan have total revenue of 8.69 billion NTD, an 10.77% decline compared with September revenue of 9.736 billion NTD and 21.3% rise in YoY.

Traditional Slack Season Plus Chinese National Day Holidays Yet to Stimulate LED Backlit TV Demand, and Taiwanese LED Manufacturers‘ Revenue of October Dropped by 10% 



Based on the analysis and statistics of LEDinside, which is a research division under TrendForce, in September this year, listed LED manufacturers in Taiwan have total revenue of 9.736 billion NTD, an 8.1% decline compared with August revenue of 10.593 billion NTD and 45.8% rise in YoY. The revenue for LED chip manufacturers in September reached 4.554 billion NTD, down 6.9% from August. The revenue for LED package manufacturers in September amounted to 5.182 billion NTD, down 9.1% from August.

Based on the industry researcher LEDinside's analysis and statistics, in August 2010, listed LED manufacturers in Taiwan reported total revenue of NTD 10.593 billion, posting a 2.4% decline, compared with revenue of NTD 10.853 billion in July and a rise of 64% YoY. The revenue for LED chip manufacturers in August reached NTD 4.89 billion, down by 1.6% from July. The revenue for LED package manufacturers in August amounted to NTD 5.70 billion, down by 3% from July. The constant increasing momentum in revenue for nearly half a year ended in August in the LED industry.

LED industry has become one of today’s most promising industries because LED is energy-saving, environment-friendly and long-lasting. In China, the LED industry has attracted great attention from Chinese governments and private investors. China’s LED chip industry has received a huge investment from 2009 to 2010.

According to LEDinside’s latest Report on China’s LED Chip Industry in 2010, China has planned to introduce over 1200 MOCVDs and more than 300 units will be added in 2010.

Based on the industry researcher LEDinside’s analysis and statistics, in July this year, listed LED manufacturers in Taiwan have total revenue of 10.853 billion NTD, a 2.7% growth compared with June revenue of 10.56 billion NTD and 80% rise YoY. The revenue for LED chip manufacturers in July reached 4.97 billion NTD, up 7.6% from June. The revenue for LED package manufacturers in July amounted to 5.88 billion NTD, down 1.1% from June.

Recently, panel manufacturers have been concerned about the excess inventory, triggering uncertainty toward demand for LED TV backlight. LEDinside’s survey showed that Korean panel vendors have started to save LED inventory since the end of 2009. Therefore, when facing the slack season, they hit the brake for LED procurement in advance. Taiwan-based panel manufacturers have formally adopted large quantities of LED backlight products; AUO is the fastest of all at this stage, creating short supply for its LED plant Lextar.  

According to LEDinside, the research division of Trendforce Corporation, the large-size LED backlight demand visibility is expected to extend into Q3. However, as TV sales conventionally enter the down cycle in Q1, the LED backlight orders reflect that the seasonality effect will occur in early  Q4. Therefore, whether the LED lighting in Q4 can prop up the market demand will become an important observation focus.

China’s LED chip industry has received a huge investment from 2009 to 2010. Although the output value is not yet large, there is no doubt about its great development speed and potential. According to LEDinside’s statistics, the gross output of LED chip industry in China reaches more than 2 billion RMB (~USD294 million, at USD 1: RMB 6.796) and the number of Chinese players by area is as much as 62. In light of LED chip sales in 2009, the top 10 LED chip manufacturers are ranked as follows:

Based on the industry research LEDinside’s analysis and statistics, in May this year, listed LED manufacturers in Taiwan have total revenue of 9.65 billion NTD (~USD300 million, at USD 1: NTD 32.235), a 6.8% growth compared with revenue of 9.033 billion NTD (~USD280 million, at USD 1: NTD 32.235) in April, and 85.5% in annual growth rate. The revenue for LED chip manufacturers in May amounted to 4.273 billion NTD (~USD133 million, at USD 1: NTD 32.235) , which increased 6% compared to that of April.

To ensure the successful introduction of LED lighting and strengthen the promotion of high efficiency, high quality LED lighting products, the US Department of Energy, who does not hope to repeat the failure of CFL early-stage promotion has driven related standardization organizations to define the Energy Star standard for LED lighting products.

In order to effectively promote high quality, high efficiency LED lighting products, involving providing accurate product information as purchase base for customers, the Next Generation Lighting Industry Alliance under the US Department of Energy launched the SSL Quality Advocates program, requiring industry players to indicate clearly and accurately important specifications of solid state lighting products on the Lighting Facts label.

The global standardization of LED lighting products has been garnering attention. A group of conventional lighting industry players from Europe, U.S. and Japan have formed an industrial alliance — Zhaga Consortium — to facilitate the design and promote the global standardization of LED lighting products.

Focusing on the future of LED streetlight development, research institute LEDinside indicated that although streetlight standards have not been established and regulations of the product specifications are set according to different needs in different regions, LED streetlight becomes modulized, and intelligent control system of LED streetlight will be more complete. It is estimated that a total of 870,000 units of LED streetlights will be installed in 2010, an increase of 42.62% compared to 610,000 in 2009.

Governments around the world began to commit in promoting energy-saving policies, and the cost of LED lighting began to fall; these factors help to stimulate the growth of the energy-saving market. Research institute LEDinside indicated that with the ban on incandescent bulbs, business opportunities of 10W and below LED light bulbs began to emerge, and that light makers have cut prices in order to compete in the market that supplies nearly 20 billion units of incandescent bulbs per year.

According to research institute LEDinside’s statistics, the revenues of global LED packaging manufacturers reached 8.05 billion U.S. dollars, a 5% growth compared to that of 2008. Notably, buttressed by the support from Samsung Group, revenues of Samsung LED jumped to the Top 4 in the world from below Top 10 in 2008, making it the world's fastest-growing LED manufacturer.  

As previously mentioned, the LED-backlit LCD TV will lead to a reshuffle in China’s color TV market, and China’s local brands have taken various measures, such as price cuts, in order to compete against foreign brands whose prices have already been reduced. Is it true that the price of the LED-backlit LCD TV will fall?

China’s color TV market is booming and the market growth potential of local Chinese brands is phenomenal. This is because the reputation of local Chinese brands is increasing, with lower prices, as well as the rapid upgrades of the CCFL-backlit LCD TV and the LED-backlit LCD TV, these products are very attractive for consumers who have not yet purchased a color TV.

In early 2009, after Samsung invested a large budget in promoting the new concept of LED TV, the market witnessed a surge in the replacement of new generation television. According to LEDinside’s latest market trend report, the total shipment of LED-backlit TVs in 2009 was about 3.5 million sets. Of that, Samsung was on the top with more than 70% share; followed by Sharp and LG. Notably, in the first wave of LED-backlit TV competition, shipment ratio of the two Korean companies accounted for 80% of the total.

TV brand vendors are highly optimistic about the shipments of LED TVs in 2010, indicated research institute LEDinside. The optimism boosts demand for LEDs and rapidly increases LED supply. Therefore, under the substantial expansion of LED manufacturing capacity, end-market sales of LED TV will be the determining factor in whether the LED industry will be able to sustain its growth momentum in the second half of the year.

Energy-saving is one of the key focuses of current social concerns. There are significant differences between various energy-saving technologies – while any technology that reduces power consumption saves electricity fees, and reduces environmental pollution by lowering carbon dioxide emission levels, some technologies consume so much energy to an extent that it offsets the amount of energy saved. Nonetheless, these technologies help lower pollution levels.

Although the development of LED street lamps is not as fast as expected, it still embraces a bright future. Optimistic about the outlook that LED street lamps are to replace conventional ones, LED enterprises are rushing to invest in LED street lamp R&D. Currently, there are over a hundred companies that launched LED street lamps, but most of them have not realized mass production. In contrast to the enthusiasm of LED street lamp makers, China's LED street lamp market hasn't taken off yet in 2009.

Generally speaking, those who believe that there is no possibility of a large scale replacement with LED street lamps mainly take two factors into account: the quality and cost of LED street lamps. The quality problem exists in all aspects: luminous flux, luminous efficacy, luminous decay, thermal dissipation, color temperature, luminance distribution, stability, homogeneity, power supply and lifespan of other components. On the other hand, the cost of street lamps is several even dozens times higher than conventional street lamps.

Based on statistics from LED industry research institute LEDinside, Taiwan’s listed LED manufacturers recorded total revenue of NT$6.852 billion in November 2009, down by 1.7% from NT$6.974 billion in October (+65% YoY). LED chipmakers’ total revenue amounted to NT$3.2 billion, up by 1.6% MoM, and LED packagers posted NT$3.652 billion in revenue, a 4.5% MoM decline.

After releasing three draft editions, the U.S. Department of Energy (DOE) has published the final ENERGY STAR Eligibility Criteria for integral LED lamps on December 4, 2009. The new Energy Star criteria will go into effect as of August 31, 2010.

Japan is the birthplace of LED outdoor lighting including LED ambient lights, LED night safety street lights, which help to reduce crime, and other novel lighting fixtures.

According to the statistics of industry research institute LEDinside, China’s overall demand for LED street lights in 2009 is around 30 thousand units, far less than the number the market had expected at the beginning of 2009. The main reason is that street light standards have not been established, and the quality and quantity of LED street lights still have yet to stand the test of time. As a result, the aspect which the government’s policy supports is starting to change from outdoor lighting to indoor lighting.

LED industry research institute indicated that Taiwan listed LED manufactures’ October revenues reached NT$6.974 bn in total, up 0.7% MoM and 23% YoY growth - of which, LED chip makers’ total revenue in October added 7.3% MoM to NT$ 3.151 bn, while LED packagers posted a 7.3% MoM decline to NT$ 3.823 bn.

At FPD International 2009 which took place from Oct 28 to 30, 2009 in Yokohama, Japan, energy saving and eco-friendliness were shown as the most important themes for the photoelectric industry. According to research organization LEDinside, thanks to increasing shipments of LED TVs and growing applications of LEDs in mid- and large-sized luminaries, Taiwan’s LED chipmakers should have a bright outlook in the future.