Epistar's LED Slack Season is Here to Stay

News Source: 
CNA(中央社)

After three months of inventory digestion, major epi-wafer manufacturer Epistar is yet expected to prolong its low utilization rate as LED market enters slack season in November and December. The company’s blue LED utilization rate is around 50% in November, according to Epistar's vice general manager Rider Chang.

Backlight and lighting market demand is very low as downstream manufacturers pulled in too much stocks during the first half, Chang said. Shortly after the production had reached a peak in July, as order volumes went down, putting Epistar into inventory digestion for three months. The company saw a slight raise in utilization rate as the inventory digestion ended in October. Even so, Epistar’s blue LED products utilization rate fell to 50% as LED market enters off-season despite AlGaInP LED products still very high in demands.

On September 1, a source already pointed out the company’s revenue had peaked in July and projected the company’s biggest backlight and downstream lighting clients will enter an inventory digestion period. And as forecasted, Epistar’s revenue had started to fall as the utilization rates declined starting August to below NT$ 2 billion (US$ 64.41 million).

Based on previous seasonal performance, the slack season is here to stay till February 2015, said Chang. Market demand is expected to grow on March or April and this marks the beginning of busy season. Compared to 4Q this year, Epistar performed a lot better last year and is expected to have a negative quarterly revenue growth with a lower base period.

Affected by off-season, Epistar’s stock price opened low and fluctuated. As of 12 p.m. Dec. 1, 2014, the price came to NT$ 57, and maximum price was NT$ 58.2.

 

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