LED peak season to chip enterprise performance elasticity

Recalling the previous year's LED backlight market, the situation can be described as bleak, the overall profitability is in a state of substantial decline. However, after a slow climb last year, this year's LED backlight market or will usher in a new recovery.

The year before last year, the LED backlight market, the rapid decline in the price of the product as well as the lighting market demand is not as expected, resulting in a total gross margin is not guaranteed. And due to the rapid expansion of the mainland's LED manufacturers, resulting in an oversupply, low prices but little sales. In addition, the backlight market as a representative of the backlight market demand for the slow growth of the backlight, but also the rapid decline in the vitality of the LED backlight market. This situation continued until last year, to 2013, LED Backlight Market Earnings began a slow climb. The main reason is that some factories especially in mainland China as a small factory recession forced the closure of the scene, makes the pile up in excess of requirement eased, coupled with the permeability due to have very low price can be improved rapidly. Although this year and can not expect the market to be able to have a fight to turn a profit, but for the next year to pave the way for market recovery.

This year, a variety of conditions have shown that the LED backlight market will be recovered this year. First of all, the TV backlight, for example, due to the promotion of the mainland color TV brands, LED backlight penetration in this market has risen sharply from the beginning of last year. 2014, LED backlight in the TV market can basically replace the cold cathode tube. Secondly, although the production of LED products has become relatively easy, but because consumers are increasingly demanding for the quality of the product, the requirements for LED products manufacturers are also getting higher and higher. The lack of advanced technology, production innovation quality products in small and medium-sized manufacturers will face closed down one after another or to do the LED downstream products of the situation, the rest will have high technology content, high quality and large enterprises, and will gradually expand. It plays an important role in controlling the saturation of the market and improving the quality of the whole market. The future of the enterprise will be more and more towards innovation, channels, the direction of the brand, the market will eventually eliminate the majority of SMEs do not have capital competition.

A number of Taiwan LED manufacturers announced revenue data show strong demand in the backlight, lighting and other products, in February the industry is not short off-season, there is a trend to enter the season ahead. Among them, the chip leader crystal electricity due to strong lighting orders, February revenue growth of nearly 5% in January, a record high over the same period last year. Based on the outstanding performance, Credit Suisse and Morgan Stanley raised the company's earnings forecast.

From the recent performance of the Taiwan LED industry chain, the upstream chip business revenue growth is generally more than midstream packaging. In this regard, UBS Securities report said that last year, the proportion of LED chip supply has dropped to 15%, is expected to be only 4% this year, the supply is relatively tight. In the case of industry prospects, the largest chip enterprise performance elasticity.