Policy subsidies to accelerate the penetration of the end of the catalytic LED

A new round of subsidies introduced at the end of the industry optimistic about the 4 quarter boom

A new round of home appliance subsidies or start in the four quarter. Recently, LED industry is expected a new round of energy-saving appliances subsidy Q4 release, Displaysearch predictor involved TV the amount of about 20-30 billion yuan, is expected to cover about 10 million of the large size of the TV, the specific way of direct subsidies to manufacturers. The mainland's major home appliance factory has confirmed this statement, direct positive Ruifeng, poly fly and other backlight business flexibility larger enterprises.

Efficient lighting financial subsidies will be landing at the end of the year, the proportion of LED increased significantly. 2013 financial subsidies to promote efficient lighting products bidding work was started in August. Tender notice clearly stated that the future will gradually reduce the size of the financial subsidies and promotion of fluorescent lamps, and gradually turned to more energy efficient and environmentally friendly semiconductor lighting products. We believe that the results are expected to be announced before the end of the year, as a catalyst for the LED lighting sector. In addition, the project will be completed in the past year, the sun and other successful projects will be completed in the year, so as to ensure that the annual performance of worry free.

Industry optimistic about the 4 quarter. From the industry survey, we found that the mainland's major LED orders since September has been better than 7-8 months, backlight LED companies have received a clear demand for TV plant stocking, while the demand for LED lighting has remained steady. Taiwan factory, East Bay, and other manufacturers are optimistic judgment lextar 4 quarter revenue chain will have more than two digit growth.

After the home appliance subsidy at the end of May exit, and lighting channel inventory slightly adjusted, resulting in LED industry the 3 quarter is not busy season. We judge with the arrival of goods from the end of September, as well as the start of the new subsidy scheme, LED industry boom will be a significant rebound in the 4 quarter of the off-season is not light for a high probability event. In addition, due to the downturn in the second half of last year, we determine the 4 quarter of this year is expected to significantly accelerate the single quarter.

Figure 1: Taiwan chip quarterly revenue

Figure 2: Taiwan packaging quarterly revenue

Two, LED lighting will accelerate penetration

LED lighting costs decreased rapidly. From our recent research situation, PHILPS, CREE, and other brands have launched billion light more low-cost LED bulb products in the same brand is similar under the premise that the performance of LED lighting and energy-saving lamps of the price has been reduced to 1-2 times. We believe that the current rapid penetration of LED lighting into a period of rapid improvement, the industry's main idea is to reduce costs, rather than mention performance.

Table 1: at this stage the focus of the industry to reduce costs

Commercial lighting to accelerate the popularity of the next 2 years to expand to office and home. As we reported earlier, commercial lighting has become one of the main drivers of this year's industry blowout. The main reasons include: 1) commercial users (especially hotels, stores and other high-end places) pay more attention to the shopping experience; 2) commercial users relatively insensitive to lighting products prices; 3) LED lighting investment recovery period has fallen within the acceptable range (1-2), and LED (universal lamp life for 2-3 years) has reached the requirements. The rapid development of commercial lighting market, good sunshine, BDO NVC, ahead of the layout of the channel business related etc..

Figure 3: U.S. lighting market segments

LED lighting penetration than expected to upgrade. International manufacturers generally outlook 2015 LED lighting penetration will reach more than 50% (about 12 years), we believe that the rapid decline in prices will give birth to more market demand, the penetration rate is expected to exceed the expected increase in the 5%.

Figure 4:15 about LED lighting penetration on 50%

From the customer perspective, the stock of the past two years, LED lighting mainly for new users and high-end places decoration replacement, we believe that with the rapid increase in price, broader stock to replace the low-end market is about to open.

Table 2:LED alternative to traditional lighting market estimates

With the arrival of the arrival of the end of September, as well as the start of the new subsidy program, LED industry boom will be a significant rebound in the 4 quarter of the off-season is not light for a high probability event. In addition, due to the downturn in the second half of last year, we determine the 4 quarter of this year is expected to significantly accelerate the single quarter. The improvement in the performance of the LED lighting will improve the penetration rate is expected to exceed expectations, hoping to promote the continued performance of the plate.