Global LED Industry Enters Expansion Phase in 2014

As countries issue incandescent bulb phase out policies, rising demand for LED lights has attracted market attention. UBS latest report is optimistic that the LED lights industry will enter another expansion phase in 2014. In addition, LED stocks will also be on the rise this year.

UBS highlighted three factors contributing to the LED lights industry expansive market: 1) Other secondary IT sectors Return on Investments (ROI) performance were not as good. 2) Driven by general lighting market, the LED lights market is expected to grow from US$ 7 billion in 2011 to US$ 45 billion in 2016. 3) LED lights factories rebounding capacity utilization rates and profitability will also allow LED stock performances to surpass the overall regional performance this year.

The LED lights industry growth trend will be similar to the DRAM industry during 1990-1995, when PC penetration rates increased, according to UBS. Conditions including off-road LED work lights and LED light bars application demands and low penetration rates will cause the industry to enter a rapid expansion phase. Dropping costs will also play a key role. Furthermore, the industry’s separate supply chains will allow manufacturers to achieve better profitability.

From the point of investment , driven by the industry’s rebounding profitability, many LED lights stocks are anticipated to catch on this “rising trend.” UBS has a positive outlook for Taiwanese LED chip manufacturer Epistar, vertically integrated manufacturer Lextar and Korean LED package manufacturer Seoul Semiconductor.