2014 LED chip supply or reproduce tension

After three years of excess supply, we believe that the 2014 LED chip supply or reproduce the tension due to the general LED lighting demand continues to grow, the demand is stable and the display backlight module LED chip manufacturers have expanded production control. We expect 2014 LED chip demand will grow by 29% year on year, but only an increase of only 17%. We expect supply and demand adequacy ratio in 2014 from 31% in 2012 and in 2013 will fall to $15% by 4%. Therefore, we expect the average selling price of LED chips will decline from 2012 30%-40%, 20% in 2013 narrowed to 10%-15% in 2014.

LED light bulb prices will stimulate demand

We expect 2014 LED is expected to account for 9% of the general lighting demand (in lumens), higher than the 3%-5% in 2013. LED lighting is widely used in commercial and outdoor lighting. For residential lighting, we believe that the continued decline in the price of LED bulbs will be an important demand catalyst. We believe that the price decline, coupled with the environmental advantages of LED will provide consumers with a more cost-effective option to use LED lighting.

Limited expansion and potential outsourcing will chip manufacturers benefit

Our verification results show that in 2014 LED chip manufacturers or only expand production 14%. We believe that prudent expansion will bring stable prices and better profitability. We also believe that there are strong patents in the Chinese chip manufacturers will benefit from the long-term potential of outsourcing opportunities (PHILPS, OSRAM and other manufacturers to seek lower cost solutions to solve in response to the falling bulb retail price).

Preferred chip manufacturers, lighting equipment suppliers; MOCVD orders or later picked up

We are optimistic about such as EPISTAR LED chip manufacturer, we expect these stocks in 2014 earnings will rebound. We have a positive view of PHILPS and OSRAM, the two should benefit from the conversion to LED lighting. We believe that the MOCVD supplier orders or in the end of 2014 or 2015 due to supply tension and pick up. The text is finished, you can press alt+4 to comment