Goldman Sachs Securities: excess capacity to compete cautiously cautious look at the LED industry in Taiwan

Although the trend of environmental protection and energy saving drive LED industry prospects, but by the terminal application demand growth rate than expected, and the influence of international companies patent barriers and other factors, the recent LED manufacturers in Taiwan in China working late does not appear breakthrough. Goldman Sachs pointed out that although LED is expected to continue to improve the luminous efficiency and continued to reduce costs, will help LED in the field of lighting and backlighting to accelerate the replacement of traditional light sources, but is expected to be impossible to achieve in the medium term. With Taiwan LED industry is not only facing the problem of overcapacity, new competitors from the mainland, panel makers also makes the competition more intense, so the current LED industry in China's Taiwan region cautious conservative views.

According to Goldman Sachs research pointed out that the global LED market size from 2008 to 2010 compound annual growth rate is expected to 18%, is expected in the next 3-5 years LED market growth momentum mainly come from the LCD backlight, car lighting, general lighting and other applications. While expected to improve the luminous efficiency and cost, coupled with the promotion of environmental science and technology development trend, will help to promote LED lighting to accelerate the replacement of traditional light sources. But due to the current actual LED technology in power saving, the amplitude is still limited, and the product cost is high, it is expected that in the medium term to replace the traditional LED wide source, probably less likely to have significant progress.

Including the LED manufacturers and LCD manufacturers in Taiwan area of our country, the past 6 months have been revised down their forecast for this year LED NB backlight penetration value, now the application of LED in LCD and TV display backlight, also haven't arrange the schedule. General lighting is expected even in 2010, I am afraid it is not easy to spread. At present, China's Taiwan LED industry in the global market share of about 20%, mainly used in mobile devices and mobile phone market. In the mobile phone market has been the lack of vitality, China's Taiwan LED manufacturers may have to face the crisis of slowing demand growth, but there are still a lot of new patent barriers to be overcome.

The application development process may be limited to technical bottlenecks in production capacity, due to upstream LED manufacturers in Taiwan China sharply this year capital expenditures, expand production capacity, including EPISTAR, canyuan, Taigu, new century, since 2008 have expanded production capacity, China Taiwan manufacturers have felt the upstream epitaxial and chip market overcapacity pressure. The new competitors from the TFT-LCD panel manufacturers and EMS manufacturers, as well as the rapid rise of China's new competitors in the region, is expected to make the LED competitive situation is more tense.

As for the downstream LED package medium-term development, Public opinions are divergent. current market, some market participants believe that, due to competition from technology giants, the first will be cut from the package side, in order to facilitate the backlight of vertical integration, so the LED package is going to challenge than upstream chip manufacturers are serious. However, some research institutions have pointed out that if the excess capacity from the point of view, the downstream packaging may also be lower than the upstream epitaxial, chip risk a little bit.

At present, China's Taiwan region LED packaging factory price computer backlight market has cut, billion light is expected to ship in the fourth quarter, other packaging manufacturers, including Wang Qi, Baihong East Bay, ligitek, currently used mainly to keyboard, mobile phone backlight products, as well as small and medium size consumer electronic products.

Overall, Goldman Sachs expected long-term development of China's Taiwan LED manufacturers, may step OEM and foundry business pattern, must accept cross licensing technology international companies, seeking outsourcing opportunities. However, if the global economy is expected to recover earlier than expected, driven by the LED terminal application market demand picked up, China's Taiwan LED industry may also have better than expected development.

Source: Lean news