Taiwanese LED Manufacturers August Performance Unaffected by Recent Stock Slip

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Taiwanese LED stocks plunged on Aug. 21, 2014 over rumors of Chinese government’s intention to raise LED tariffs. To clarify market rumors, LED manufacturers Lite-On, Everlight, Epistar and Unity Opto all stated they did not receive any notices regarding increased tariffs from Chinese authorities, and an uptick in tariffs would have limited impact since they all had LED factories in China. These Taiwanese LED manufacturers also emphasized delivering good revenue performances for August 2014.

Backlit-LED TV demands was down slightly in July and August 2014, said Liu Pang-yen, President of Business Group, Everlight Electronics. However, with gaining trajectory of Chinese client orders in September, he noted Everlight’s revenue performance in August is likely to set new records. The company’s third quarter profits are expected to be better than second quarter profits this year.

“LED stocks were wrongfully slaughtered,” said Unity Opto Chairman

Wu Ching-huei. The company will deliver a stellar performance throughout August to September 2014 to surprise the industry. China has not imposed any tariffs on LEDs, emphasized Wu. Additionally, every Taiwanese LED manufacturer has factories in China, and would not be affected by raised tariffs.

The market noted the disruption in the stock market yesterday was mainly due to Epistar’s conservative outlook for second half of 2014. Epistar noted, TV backlight sources are entering annual seasonal adjustments. In contrast, LED lighting demands remain strong and could compensate TV backlight’s sliding demands, utilization rates will be maintained at the same levels in 3Q14.

The TV market is entering a seasonal cycle, analyzed Epistar. TV manufacturers tend to stock up LED supplies from March to June every year, which is why 2Q14 is usually the procurement peak season. After that the next peak season will come around September ahead of Christmas season, where new LED models are purchased, and triggering a new stock up wave. The TV backlight season in 3Q14 tends to be lower than 2Q14. These are the industry’s normal slack seasons, and this year was no exception.

Epistar has lowered LED for TV backlight estimations since July 2014, but remained optimistic that strong LED lighting demands in the month could compensate lighting demands. Thus, revenue performance will still be good. Epistar estimated TV backlight revenue share will be about 25 to 30 percent, due to impact from the low season.

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