LED face shuffling in 2013 is not easy to make money

Leading crystal chairman Li Bingjie of LED Epistar, said yesterday (28th) that the industry outlook for the fourth quarter is expected to be better than expected. However, the competition pressure of mainland industry for bargaining prices continues, and next year “will be very hard and it is not easy to profit”. It is not until 2014 that the market conditions will improve.

Li Bingjie attended the interim meeting of shareholders of the company in conjunction with Guangjia yesterday and talked about his views on the industry economy. He bluntly stated that the industry is now in a period of shuffling. In the next three years, the number of LED manufacturers in the Mainland will be reduced from the current 60 or 70 to only 5, and Jingdian has already made preparations for a "fight."

In terms of short-term operations, Li Bingjie believes that the 4th quarter of the previous year was a traditional off-season, and the revenue of crystal power revenue was reduced by about 20%. However, at the present stage, the visibility of backlight orders was seen in October, indicating that customers will demand for the Chinese New Year Lunar New Year's stocking next year. The purchase of gas continued for 11 consecutive days and the demand for terminals increased significantly. Customers placing orders will be more active and help the overall operation better than expected.

Taiwan’s LED factories such as Yiguang, Yuyuan and Dongbei are also optimistic about the situation in the fourth quarter, but they are generally “unsure” about the economic situation for the next year.

Li Bingjie is relatively pessimistic about the LED business outlook next year. He believes that due to the continued low prices of mainland manufacturers grabbing the market, coupled with the backlight penetration rate has been raised to a certain level, the growth rate is hindered, and the industry will not be less challenge than this year.

Although the overall demand continues to increase, but the price decline is still fierce, it is still very hard for manufacturers to profit.

Li Bingjie estimates that next year LED industry revenue will be equal to this year, and profitability is extremely challenging. With the industrial downturn, the industry will gradually emerge as a whole. According to his understanding, there are currently 10 domestic epitaxial plants talking about the merger, with the industry completed the reshuffle, 2014 is the time point for the economy to improve.

In terms of industrial applications, Li Bingjie said that the LED bulb market is gradually taking off. In the next three years, it will grow at a rate of 70% annually. There is no problem with market demand, but prices will still be revised downwards.

Based on the price trend of LED bulbs in the past two years, the same specification products have fallen from US$20 (approximately NT$590) to less than US$10 (approximately NT$295), a decrease of more than 50%, so even if market demand continues to increase However, the price decline will only increase the annual output value of the market by about 20% to 30%.

He believes that the largest application of LED is still in the backlight market, which currently accounts for 50% of the total, which is 1 times that of lighting.

It is expected that by 2015, the proportion of backlight and lighting will reach the same level, each accounting for 30%.