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LED players suffer losses as Philips cut prices

LED players suffer losses as Philips cut prices

By BizLED Bureau

June 30, 2015: With Philips lowering the price of its bulbs this quarter, lead to real slump in the market in this quarter. Leading LED chipmaker Epistar Corp, which was forced to cut its prices, hopes to improve its performance in the next quarter and earn better revenue. It is banking on recovering demand for LED lighting and stabilizing prices after the industrial slump hit bottom this quarter.

Philips? price cuts for LED bulbs spurred severe pricing competition in the US market this quarter. The move forced LED chip suppliers, including Epistar, to also lower their prices or redesign the chips to meet clients? demand.

Philips launched a sales campaign in April 2015, offering two 60-watt equivalent LED bulbs for just US$ 4.95 in the US market, which is a sharp reduction from its previous price of US$9.97 for a single lamp.

Last month, Epistar?s revenues plunged 18.8% from a year earleir and 12.4% from April to NT$2.26 billion (US$72.5 million). Sales for April and last month totaled NT$4.84 billion, a decline of 8.67% from the same period last year, according to the company?s filing with the Taiwan Stock Exchange.

Epistar?s operating income plummeted dramatically in the first quarter of this year to NT$21.03 million, from last year?s NT$319.01 million, mainly due to inventory correction because of weak demand for LED lighting and backlights.


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