LED industry: revenue growth QoQ industry will gradually out of the off-season

LED industry is stronger than the market index in March: March Taiwan LED chip index rose 2.37%, LED package index fell 0.66% over the same period Taiwan semiconductor components index fell 7.3%, Taiwan index fell 0.51%. March LED industry index stronger than the Taiwan semiconductor component index and the Taiwan weighted index.

March revenue increased significantly: We tracked 9 Taiwan LED chip companies in March total revenues of NT $4 billion 157 million, an increase of 18.3%, growth of 23.1%; 9 LED packaging enterprises in March sales amounted to NT $12 billion 120 million, down 2.83% year-on-year growth of 33.9%.

LED industry is gradually out of the traditional off-season, with LEDTV and LED tablet computer, intelligent mobile phone backlight used for products such as heavy volume, LED industry will usher in the second quarter of the season.

Industry developments and comments: the South Korean government proposed in 2012 will be LED lighting market share increased to 15%, and made a series of relevant policies to foster LED industry; SKYWORTH, TCL announced the March LED LCD TV sales, the upstream enterprises can enter the TV backlight application has become one of the important factors to determine the status of supply and demand in the LED industry; Q2 sapphire substrate prices declined slightly by 3% to 5%, below market expectations.

The rating and investment advice: industry of domestic LED industry, 2010 annual MOCVD new machine will release a lot of new capacity this year, capacity expansion caused by chip structural imbalance between supply and demand, domestic manufacturers can enter the TV backlight is the important factors that influence the degree of pile up in excess of requirement. Overall, the decline in prices will help reduce the cost of downstream applications, LED lighting applications is expected to start in late 2011, early 2012. The LED industry investment strategy, we believe that the current can focus on high quality, high-end chip package and lighting applications, we maintain the LED industry "recommend" investment rating, maintaining Silan, Sanan optoelectronics, Yankon, nationstar, Lehman photoelectric "recommended" investment rating.