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Taiwan's LED makers strained by strong demand

TAIPEI, Taiwan -- Everlight Electronics (億光), Epistar Corp. (晶元) and other light emitting diode (LED) suppliers recently have seen strong orders growth, triggered by order pull-in from both Taiwan and mainland China's TV customers.

China's TV makers are rushing the island's LED makers to deliver devices to fill their inventories for the predicted shopping frenzy during the mainland's May 1st Labor Day break, according to local media outlets.

Innolux Corp. (群創) and AU Optronics Corp. (AUO, 友達) are the primary suppliers of LCD panels for ultra-high definition (UHD) TVs in Taiwan. AUO-held LED maker Lextar Electronics Corp. (隆達電子) earlier told the Commercial Times that it has been swamped by orders from both Taiwan and China's TV makers.

Currently depending on backlight LEDs for over 70 percent of revenue, Lextar has seen its revenue pick up in March.

Chairman Alpha Wu (吳慶輝) of Unity Opto Technology Co. (東貝光電) says his company has been recently urged to deliver LED backlights by China's TV makers.

Suppliers of sapphire substrates are also feeling the ripple effect, with LED chipmakers having booked over 70 percent of their capacity for backlight products.

Chairman Robert Yeh (葉寅夫) of LED packaging house Everlight Electronics earlier told the Apple Daily that he is convinced the combined revenues of his company and chipmaker Epistar Corp. are likely to unseat Nichia Corp. soon as the world's No. 1 LED maker, while stressing that he doesn't have a timeline since Nichia, the world's largest LED maker, maintains stable growth.

Currently, Everlight Electronics and Epistar Corp. are the world's No. 1 LED packager and chipmaker by production capacity. Last year their combined revenues of NT$47 billion trailed Nichia's US$2.5 billion by at least 30 percent.

5 Million LED Bulbs Sold in Taiwan in 2013

Taiwan's LED light bulb market continued strong growth in 2013, as the average unit price slid to NT$200 (US$6.62) last year, according to a research report by the market information advisory firm GfK.

Some five million LED light bulbs were sold in Taiwan in 2013, an annual increase of 43 percent, the Central News Agency cited GfK as reporting.

The product's market share increased from 39 percent to 69 percent in 2012 and expanded to 76 percent in 2013, it said.

Although the drop in LED light bulb prices has eroded the market for energy-saving light bulbs such as compact fluorescents, it is good that consumers have more options, GfK said.

LED lighting tubes also became more popular in 2013, with sales growing amid increasing public awareness of sustainable development, the research firm said.

"Once the average selling price reaches a sweet spot for consumers, the product's market scale is likely to expand and drive the overall lighting market," said Hsieh Huai-huan, an analyst at GfK Taiwan.

The price of LED light tubes averaged NT$750 in 2013, a "relatively high" level compared with NT$60 for other tubes, he said.

With fiercer market competition among companies and brands, LED lighting will continue to drive the general lighting market, Hsieh predicted.

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