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The industry sentiment continues to improve, and LED lighting is expected to fully explode in 2014.
Jan 24,2014
The continuous growth in demand for lighting has driven the LED industry into a one-way upward channel in 2013. With further restrictions on the use of incandescent lamps and the decline in prices of LED lighting products, LED lighting has welcomed rapid development opportunities. Recently, major chip manufacturers have almost reached full capacity, with the utilization rate of four-element high-brightness LEDs reaching 100%, and the utilization rate of blue LEDs exceeding 90%. Production lines will work overtime to meet demand, and the scene of overtime during the off-season has once again reappeared, reminiscent of the boom in 2009 and 2010. Based on data from major manufacturers and research institutions, it is expected that the shipment scale of LED lighting will exceed 100% growth, and related companies are also expected to achieve better-than-expected profits.
The industry is continuously warming up.
The signs of this round of market improvement appeared at the end of last year. The revenue of LED companies in Taiwan has always been an indicator of the industry's prosperity. Although December is traditionally considered an off-season, the revenue of chips in the LED industry chain increased by 59% year-on-year in December last year, and the overall revenue of packaging increased by 53%. Major companies such as Everlight, Lextar, and Epistar have also shown encouraging revenue trends.
Among packaging giants, Everlight's revenue in December was 2.26 billion New Taiwan dollars, with a year-on-year growth rate of 70%. Lextar benefited from the recovery of orders for laptops, flashlights from Korean mobile phone manufacturers, and increased demand for TV backlighting, with December revenue reaching 1.097 billion New Taiwan dollars, a month-on-month decline of 5.84%, but a year-on-year growth rate of 55%. Among chip manufacturers, Epistar's revenue in December reached 2.047 billion New Taiwan dollars, slightly down 1.36% month-on-month, but a year-on-year growth of 78.8%. Benefiting from orders for lighting and backlight sources, Everlight expects its shipment volume to continue to grow in the first quarter of this year.
Leading manufacturer Epistar admitted that the order visibility for the fourth quarter of last year and the first quarter of this year is much better than expected. Epistar's four-element high-brightness LED epitaxy process is already at full capacity, significantly better than the 60-70% level of previous years, and the utilization rate of blue LEDs also exceeds 90%. They will even work overtime during the New Year, maintaining full capacity throughout the first quarter, with better-than-expected economic visibility.
From the recent technological development trends, the significant progress in LED lighting technology has further reduced production costs, which is expected to attract more ordinary consumers. It is understood that the luminous efficacy of current LED lighting products can already reach over 200lm/w. At the same time, the selling price of terminal lighting products in the market has continued to decline, with products from companies like Osram and Cree already reduced to around 10 dollars, while the price of energy-saving lamps of the same brand is about 5 dollars. Considering the significant difference in lifespan, the actual usage cost of LED lamps is cheaper than that of ordinary energy-saving lamps.
Due to the decline in LED chip prices, manufacturers that originally focused on display chips are also increasing their investments in lighting. HC Semitek stated that the revenue share of LED lighting chips is gradually increasing; Silan Microelectronics also stated that the newly commissioned machines will be used to produce lighting chips.
Lighting manufacturers are the first to benefit.
From the perspective of the LED industry chain, it mainly includes four major sectors: LED raw materials (MO sources, luminescent materials, etc.), LED chips, LED packaging, and LED lamps. From the perspective of benefits, the first to benefit are downstream lighting manufacturers with channel advantages. The second is the LED chip and packaging segments, which have seen rapid increases in capacity utilization rates alongside growing demand, and the prices of LED raw materials have also been somewhat boosted.
From a functional perspective, it is mainly divided into LED lighting and LED backlighting, with the industry being more optimistic about the development of LED lighting. The recent situation of Ruifeng Optoelectronics also verifies this judgment. The company's management stated that based on stabilizing the LED LCD TV market, they have increased their efforts in the LED lighting field, achieving corresponding growth in sales and profits.
Analysts say that from a growth perspective, since the penetration rate of LED backlighting in panels and smart terminals has exceeded 90%, future growth in backlighting will mainly come from natural growth, while the growth of LED lighting will benefit from both penetration and natural growth, leading to a "Davis double hit".
In fact, manufacturers focusing on lighting chips are rapidly increasing their capacity utilization rates. In 2012, the revenue of LED chips from Dehao Runda in China was only 35.5 million dollars, but it reached 56.5 million dollars in 2013, growing by more than 50%; Yuanrong Optoelectronics saw its revenue double in 2013; while Sanan Optoelectronics, Tongfang Optoelectronics, and Hualei Optoelectronics all maintained high levels of capacity utilization. It is expected that this rapid growth trend will continue in 2014. Currently, international manufacturers have reached a consensus that the demand for LED lighting will enter an explosive period in 2014, and LED lighting will be fully rolled out.
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Address: No.10 Kaicheng Road, Qilin Gate, Jiangning District, Nanjing City, Jiangsu Province, China
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