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Taiwan LED firms gain from National Day of China

18 Sep 2012

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According to the latest report from LEDinside, the LED research division of TrendForce, listed Taiwan LED firms' revenues in August registered a 2.64 percent MoM increase and a 7.6 percent YoY increase. Benefiting from the increasing demand from October 1 holiday (National Day of the People's Republic of China), some LED makers have been receiving more backlight orders.

The demand growth in the Chinese market is attributed to China's subsidy policy for energy-saving products enacted since June 1, which caused the demand for new TV models in the coming mid-autumn and October 1 holiday to surge. On the other hand, August and September are the peak seasons for panel exports. Given that panel price is on a slight uptrend, manufacturers increase their stocking motivation in advance. However, TV sales outlook is not clear yet, and the manufacturers are still facing the concern of double booking and high inventory level.

In addition, looking at LED companies' revenues, most orders are acquired by the first-tier companies amid the fierce competition. The LED industry continues to be haunted by the oversupply concern, so many manufacturers are still trying to develop a long-term plan. After the Taiwan government allows Chinese companies to invest in Taiwan ventures, Taiwan firms begin to seek opportunities of forming alliance or mergers in order to maintain their competitiveness.


Taiwan LED firms: 2.64% August MoM increase

A lot of Chinese companies are interested in investing in Taiwan ventures. With mergers, alliance and product lines of wider variety, the companies can improve its strength in price negotiations and license technologies and patents with each other. In all, the industry can benefit from it and prevent it from falling into a price war. China's largest LED epi/chip maker, Sanan Opto, is seeking to invest in Taiwan ventures in order to acquire key technologies and make inroads into LED backlight supply chain. Along with Chinese banks' funds, the company has a chance to acquire a certain share of Taiwan listed companies, which can help it increase its product lines (backlight applications) and improve its technological level.

Benefiting from the large-sized backlight and consumer electronic orders from China, Taiwan listed LED chip makers' August revenues increased MoM by 1.3 percent and YoY by 1.5 percent. However, following the LED price drop in August 2012, Taiwan firms noted that the chip price will stay flat for the next few months.

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