Epistar remains conservative about 2008 LED outlook
Orders for high-end LED products are not growing as rapidly as expected, and competition is strong in the low-end markets.
Lee indicated that the company's order visibility for high-end products is not growing at a rate that the company expected, as current demand growth for products such as LEDs with a brightness of 1,300-1,600 mcd (utilized in small- to medium-size panel backlighting applications) is not robust.
Epistar noted that order visibility since March is not exceeding its capacity, unlike last year when the company's capacity could not handle the volume of orders the company received. Epistar currently has a capacity of 80 million units for ultra-high brightness (UHB) LEDs.
The company's monthly revenues grew steadily last year, peaking at NT$1.05 billion ($34.4 million) in October of last year. Since then, revenues have declined and the company reported revenues of NT$834 million in February 2008, though the company indicated its orders for March are at around NT$950 million.
Lee did point out that demand for low-end products such as LED-based Christmas lights continues to grow. However, the low-end segments are competitive and marked by sustained ASP drops. Lee stated the company's fears that growth in demand in these segments will not compensate for the falling ASPs.
In addition, due to seasonal weakness during the first quarter, Epistar has already trimmed the prices for LED products since the beginning of 2008. The company is likely to feel market pressure to slash prices again in April, if it does not see demand for LED products recover, said Lee.