LED boom reversed, eleven holiday is the key

According to Xie Mingxun, deputy general manager of Epistar’s R&D center, the buying of LED TVs has a crucial impact on the development trend of the overall LED business in the second half of the year.

Xie Mingxun, deputy general manager of Epistar’s R&D Center, said that due to the impact of macro-control policies in mainland China, Chinese banks’ lending has been tightened, and SMEs that need to be financed will face a fate to close down. The impact of this policy is greater than the manufacturer’s expectations, plus North America. Unemployment rate is still high, resulting in a tightening of consumer spending, which is expected to drag on LED TV market sales in 2011 and affect the LED market size.

Xie Mingxun further analyzed that although most companies are not optimistic about the LED economy in the second half of 2011, there will still be opportunities to stimulate market growth in the second half of the year when China’s macro-control policies are turned; in addition, the downstream industry’s response to the 11th holiday in August and September The quantity of stocks is also a trend to observe whether LED TV's demand will recover in the second half of the year. Therefore, Epistar will pay close attention to the development trend of these two indicators, and then determine the proportion of incoming stocks in the fourth quarter. In addition, the growth rate of Korean LED TV market is also worth considering.

Compared to LED TV, LED lighting will continue to drive the growth of the LED market in 2011. Although some LED manufacturers are concerned that the lighting market demand in mainland China will be lower than expected in 2011, Xie Mingxun emphasized that LED lighting market in 2011 will not Affected by the boom, demand continued to strengthen, becoming a key product line for various LED supply chain manufacturers to focus on revenue contribution.

It is worth noting that the sluggish demand in the LED TV market has also dragged down the prices of upstream sapphire single-crystal and sapphire substrates, and the gross margin has shrunk rapidly. Xie Mingxun does not say that after the LED boom, the price of sapphire substrates has dropped below US$10, which will change the existing LED epitaxial and crystal grain cost structures. However, at this stage, each epitaxial grain plant has a material inventory of 1 to 2 months, so the price response will not immediately appear in the third quarter.