Taiwanese LED manufacturers are accelerating their shift to lighting applications, but may face a red ocean of OEMs

According to LEDinside, the green energy division of global market research firm TrendForce, the LED market demand was affected by the slowdown in the backlight market demand and inventory counts. In June 2013, the total revenue of Taiwan's listed OTC LED manufacturers fell to NT$10.6 billion, of which the revenue of Taiwan's listed OTC LED chip manufacturers reached NT$3.97 billion, and the revenue of Taiwan's listed OTC LED packaging manufacturers also grew to NT$6.63 billion.

    Faced with the decline in demand in the backlight market, Taiwan LED manufacturers have turned their attention to lighting applications, hoping that the revenue from lighting application products can make up for the revenue from backlight applications. Therefore, Taiwan manufacturers such as Epistar, Everlight, and Lextar have all outsourced products to first-tier international lighting manufacturers in the form of ODM and OEM, hoping to make up for the capacity utilization rate. However, whether they can get out of the red ocean of outsourcing prices depends on whether manufacturers can think about moving towards more sophisticated and differentiated profit products in addition to increasing production capacity.

Backlight market growth momentum slows down in the second half of the year

    According to TrendForce survey data, the shipment of LCD TVs in 2013 has been revised down from the 215.5 million units estimated at the beginning of the year to the current 208.8 million units, with an annual growth rate of only 1.1%. The main factors are that the global economic performance is still uncertain, especially the poor performance of the European market, as well as the announcement of the end of the energy-saving and people-benefiting subsidy policy in mainland China, the slowdown in the growth momentum of China's TV shipments, and the decline in shipments due to the increase in demand for TV size. Since the stocking effect of the TV backlight market in the first half of the year only lasted until the end of May, the TV backlight market in the second half of the year can only hope that the terminal sales performance can exceed expectations.

Lighting market demand grows slowly in the second half of the year

    According to LEDinside, the demand for small and medium-power LEDs in indoor lighting is quite strong, whether it is commercial lighting such as tubes or directional light source products such as PAR lamps, downlights and AR111. Therefore, the small and medium-power packages of major manufacturers such as Samsung and Nichia, especially in warm white temperature, are facing a certain degree of supply shortage in 2Q13. Facing the lighting market demand in 2H13, LED package manufacturers have successively launched new products or better product specifications and luminous efficiency and color rendering requirements, although they are still in the sample delivery stage. It is expected that after the launch in the third quarter, the price of LED packages will have a significant price drop. In addition, looking at the high-power LED market application, it is estimated that in the second half of the year, the demand for tenders in mainland China will be released, which will have the opportunity to drive the demand for high-power LED products. Therefore, LEDinside estimates that the output value of LED packages in the lighting market will reach US$2.98 billion in 2013.