Seoul Semiconductor Reports Fourth Quarter and Fiscal Year 2019 Results

Seoul Semiconductor published its fiscal 2019 and 4Q19 financial results. The company posted a consolidated revenue of KRW 1129.5 billion (US$ 954.5 million) and operating profit of KRW 49.6 billion (US$ 41.91 million) for 2019. For 4Q19, the consolidated fourth quarter revenue was KRW 280.9 billion (US$ 237.36 million) while the operating profit amounted to KRW 13.9 billion (US$11.75 million).

Continuing global economic slowdown due to trade and political conflicts including trade war between the US and China led to the increase of inventory and decrease of customer demand leading to price falls in the LED industry. As a result, Seoul’s earnings decreased by 5% YoY. However, in order to respond to uncertain market conditions, Seoul has proactively focused on driving operational efficiencies by continuing to develop new products and technology to increase sales of high value-added products, producing 5% margin.

The sales of general lighting declined year-on-year due to continued weakness in pricing induced by the industry’s high inventory. However, the sales of automotive LEDs continued to grow helping offset overall sales decline for the company and the sales of WICOP products, a differentiated patented technology of package-less LEDs, achieved more than double-digit on-year growth by responding to the demand for larger and slimmer display screen in the TV and monitor market.

In the beginning of 2020, Seoul and Seoul Viosys also introduced their development in Micro LED. Named Micro Clean LED, the technology is a single-pixel RGB Micro LED enabling the design of 4K resolution TVs from 42-inch to 220-inch displays and signage displays. Introduced at the recent CES 2020, the Micro Clean LEDs are ready for mass production.

For 1Q20, Seoul Semiconductor is expecting a -7% to 15% QoQ with a sales guidance of KRW 240 to 260 billion (US$ 203 to 220 million) due to a slow season for the LED industry and potentially reduced demand from end customers due to decreased production time affected by the coronavirus outbreak.

Under the concern of coronavirus and the continuous US-China trade dispute, the Korea LED maker might benefit and develop long-term partnerships with customers as it provide stable supplier from its capacity in Korea and Vietnam.

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