Morgan Stanley: recent LED shortage third quarter relief

LED epitaxial crystal electric Dachang due to the recent rate has reached full use of blue LED and four yuan LED capacity, LED applied to LCD TV backlight LCD TV products, as well as lighting, outdoor display applications demand continues to grow, the theme constantly, pushing up the price of up to 80 yuan nt. However, Morgan Stanley Securities pointed out that because the LED chip may supply shortage since the third quarter began to ease, plus EPISTAR in the field of lighting layout are lacking, thus giving Underweight reduce investment holdings rating, but the target price of NT $22 from the original (below, NT), raised 65 yuan.

According to Morgan Stanley Securities Analysis, the market for the short supply of LED in the near future, may make the operation of the second quarter of the electricity market has improved, seems to expect too much. The main reason is the LED extension manufacturers have started to purchase equipment, is expected to the recent new capacity, may be in the third quarter of this year to open next year, when the LED chip supply shortage situation will ease.

On the other hand, despite the introduction of imported LED backlight large size products, especially LED backlight LCD TV much anticipated. But Morgan Stanley Securities stressed that the competitive situation of LED is also changing, including panel manufacturers and system manufacturers have toward LED layout integration, such as new capacity Samsung LED is going in the second half of this year will be put into operation, which is not conducive to the development of pure LED plant competitiveness maintenance.

Morgan Stanley Securities is expected, from the capacity uncertainty of persistent pile up in excess of requirement, will be more than ODM OEM orders, plus crystal electrical path layout in the lighting business aspects of the lack of expected profit performance, crystal electric next will not easily return to boom in 2007. Under the premise of limited profit and shareholder interests are limited, the current investment in the maintenance of Underweight crystal rating, but the target price from the original 22 yuan, up to $65.