Epistar is ready to endure Slack Season during Chinese lunar new year holiday16-01-2014
The revival of the LED lights market is certainly a hot topic in the investment market recently. Foreign investor’s interest in LED lights companies is gradually growing. In a recent report, Credit Suisse gave their outlook for Taiwanese LED chip manufacturer Epistar. The financial firm believes that is in a good position to ride on the commercial LED lights demand growth and outgrow the market in the TV backlighting space based on their advantages in technologies and scale. However, the company will still be affected by seasonal factors with the approaching Chinese Lunar New Year. The company’s 1st quarter in 2014 revenues are expected to have a 10 percent QoQ decline.
Epistar is ready in 2014 to ride on the commercial LED lights demand growth and outgrow the market in the TV backlighting space, according to Credit Suisse. LED lights penetration rate is anticipated to continue to increase, from 21% in 2013 to 29% in 2014 and 37% in 2015. The report states that although LED backlighting market penetration has matured, Epistar and other chip manufacturers will benefit from thin direct-type LED TVs demand for better LED chips . In addition, the company’s package free product ELC for backlighting and commercial lighting should help the profitability on higher ASP.
Due to coming Chinese Lunar New Year and traditional slack season, 1st quarter in 2014 is anticipated to be affected and see a decline of 10 percent from 4th quarter in 2013. Operational revenue is estimated to rebound after March. Resulting from lower utilization during the first quarter compared to 4th quarter in 2013, Credit Suisse believes that Epistar gross margin should decline a little.