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Taiwan’s LED component sector suffers setback in first half of 2015

Taiwan's LED component sector suffers setback in first half of 2015

By BizLED Bureau

September 9, 2015: The LED component sector in Taiwan witnessed a sharp decline in demand and production in the first half of 2015. Taiwan’s LED component industry, including LED chips and epitaxy, totaled about NT$19.8 billion (US$ 604 million), which is a decline of about 20% from 2014.

According to Photonics Technology & Industry Development Association (PIDA), this decline is due to the reduced global demand for a wide range of electronic products like TV, notebook, computer monitors, etc. This has affected LED lighting sales, and has, therefore, reduced production value of the LED component industry in Taiwan.

PIDA said that in 2015, sales of LED products across the world are expected to decline by 10-20% compared to 2014. PIDA has pointed out that China could be the only market that could maintain the growth rate as was witnessed in 2014.

Many LED lighting suppliers are faced with price competition. A weakening pricing power of LED chip makers has also had adverse impact on the LED component industry, lowering the sector’s production value drastically.

In the first half of 2015, the top 10 LED chip suppliers in Taiwan together witnessed a decline of 9% in sales, year-on-year. They together incurred a loss of NT$1.13 billion during the same period. However, these 10 top suppliers made a profit of NT$89 million during the same period in 2014.

Some of the major suppliers tried to find out strategies to come out of the crisis. For example, Epistar Corp, the largest LED chip maker in Taiwan acquired a small rival, Formosa Epitaxy Inc., but it did not show much impact on its sales revenue, neither on its performance. Unfortunately, it also fell victim to the crisis.

According to PIDA, the LED packaging and testing business in Taiwan is comparatively doing better. The output of the LED packaging and testing services providers totaled NT$44.9 billion in the first half of 2015, which is a slight down from 2014.

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