Taiwan factory clears inventory and returns to zero, welcoming LED lighting orders that continue to grow during peak lamp replacement season

In April, major LED brand manufacturers launched a price war for LED light bulbs. Each major manufacturer has launched new versions to respond. After four months of digestion of old version inventory, LED lighting orders from Epistar and New Century have seen a return. September to December will soon enter the peak season of lamp replacement in Europe and the United States. Compared with the current price of LED light bulbs, the fourth quarter will enter the absolute replacement stage.

The two major chip factories in Taiwan both agree that LED lighting orders will return in September. Epistar said that the second and fourth quarters are the peak seasons for lamp replacement in the terminal market. Chip factories usually respond to the demand of the terminal market in the fourth quarter in the second to third quarters. If the terminal sales situation in the fourth quarter is good enough, there will be a wave of demand to replenish inventory. Epistar’s LED lighting customer orders were better in September than in August, with the number continuing to climb. However, Epistar’s production capacity is huge, and it is still only a sporadic customer order. It remains to be seen whether there will be a comprehensive recovery.

New Century said that there will be a decent rebound in September. In addition to the recovery of LED lighting orders, Japanese and Korean TV customers have started to restart the purchase of goods in September due to revised flip-chip specifications. Revenue in September has the opportunity to show double-digit growth, and the overall operation should have the opportunity to bottom out from June to July.

Packaging factory Dongbei pointed out that September to December is the peak season for lamp replacement in Europe and the United States. Philips has launched a price war since April to guide various brand manufacturers to follow up. Major manufacturers have also launched more competitive new versions of light bulbs in response. After four months of digestion, the old version inventory has been almost cleared. In addition, the price of LED light bulbs has become equivalent to energy-saving lamps. There is no doubt that LED light bulbs are the first choice for light replacement. The fourth quarter is expected to enter the absolute replacement stage.

LED packaging factories also analyzed that in the past 2 to 3 years, the price of blue-ray chips has dropped sharply. Starting from the second quarter of this year, price wars have begun. The LED supply chain has been forced to adjust inventory and propose new versions in response. A packaging factory in Taiwan has improved its design, and its costs have been cut in half. Improving the cost structure of LED bulbs through design is far more efficient than lowering the price of blue-ray chips. Therefore, the price pressure on blue-ray chips has slowed down. Except for seasonal price cuts, a steep drop is unlikely, and demand is about to enter the traditional peak season. The U.S. economy will recover strongly this year, and the LED industry should be looking forward to the fourth quarter.

As for TV backlights, Epistar is still conservative. The main reason is that the depreciation of currencies in various countries affects purchasing power. There are no incentives for large-scale international events this year. Apart from the release of urgent orders, the fundamentals of TV backlights have not changed much.