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LED suppliers expect turning point in 2014

TAIPEI--Major Taiwanese LED products suppliers have voiced expectation in recent days that the industry will reach a turning point in 2014, with demand and supply to tilt toward a balance in the second half of this year.

These companies, including Everlight Electronics Co., Epistar Corp. and Unity Opto Technology Co., are upbeat about the global LED market after many suppliers in the industry have made plenty of efforts to cap production, in a bid to rein in supply.

In the two past years, many local LED companies faced pressing challenges resulting from a supply glut, which caused some of them to incur losses at a time when their Chinese counterparts were trying hard to expand production capacity with assistance from the government.

Now, these suppliers have seen the light at the end of the tunnel since China's government has shelved its policy of doling out subsidies, and many countries have imposed a ban on the use of incandescent lights, while encouraging the adoption of LED lighting due to environmental concerns.

According to recent research reports, demand for LED lighting is expected to grow 50-100 percent in 2014 compared to a year earlier. The reports said as the pace of capacity expansion slowed down in2013, and efforts in developing new technology have helped reduce costs, many loss-incurring local LED companies could turn a profit this year.

Robert Yeh, chairman of Everlight, said as prices of LED lighting have fallen to levels acceptable to many consumers, he expects demand for LED lighting will expand significantly this year.

Yeh said he expects LED lighting to account for more than 30 percent of Everlight's total sales in 2014, causing it to top revenue generated from the company's LED backlight operations for the first time.

Discarding his pessimism seen in the past two years, Epistar Chairman Lee Biing-jye said the LED business has entered a prosperous stage which will last for no less than two years.

Lee said he predicts LED lighting demand for 2014 will double from 2013. He added that due to the launch of 4K ultra-high definition TVs and the adoption of LED components by the auto industry, the LED industry will have another driver for growth in 2014.

LED chip maker Unity Opto has also embraced an upbeat mood for this year, with Chairman C.H. Wu saying that his company has witnessed orders streaming in during the current quarter as the industry has emerged from slow effects in the fourth quarter.

Wu said Unity Opto will adjust its product portfolio by raising high-end chip production as the market still has a shortage in high-end chips, while a supply glut in lower-end chips continue to weigh on suppliers' pricing power.

Wu said he expects high-end chips will account for 50 percent of its total sales in 2014, up from 30 percent seen in 2013.

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