Epistar Corp (晶元光電), the nation’s biggest LED chipmaker, is likely to resume its growth momentum in the first quarter of next year in view of rising component restocking in China and South Korea after experiencing weakening demand and falling prices this quarter, Primasia Securities Co (犇亞證券) said yesterday.
“We forecast the company’s sales to grow by 25 percent to 30 percent year-on-year in 2011,” Primasia said in a client note yesterday.
Average selling prices (ASPs) for LEDs are forecast to face rising pressure after the expanding installation of new metalorganic chemical vapor deposition (MOCVD) equipment by companies next year, as well as a parity between supply and demand in the LED sector, Primasia said.
On average, MOCVD equipment can supply about 380,000 units of LCD TV backlights a year, JPMorgan said in an investment report on Nov. 24.
As the ASP may drop by a range of between 10 percent and 15 percent next year, Epistar is likely to expand its sales of high ASP margin TV and lighting LEDs by between 55 percent to 60 percent next year, from about 40 percent to 45 percent this year, to offset the downward pricing trend, Primasia said in the note.
Rider Chang (張世賢), Epistar’s vice president of finance and accounting, told reporters on Dec. 3 that the LED lighting business accounts for about 20 percent of its sales and LED backlighting makes up 50 percent.
JPMorgan said last month that Epistar is in the process of shifting its focus from TV backlights to lighting applications and is undertaking a fast product mix change in order to sustain its earnings growth.
Primasia yesterday maintained a long-term positive stance on Epistar and suggested investors load up on the company’s shares whenever pulling back occurs, after the Hsinchu-based company announced plans to issue US$280 million of zero-interest overseas convertible bonds over next two years to expand investment in a Chinese joint venture.
In a stock exchange filing on Thursday, Epistar said it would invest an additional US$19.5 million in United LED Shan Dong Corp (冠銓山東光電), a joint venture established in China with United Microelectronics Corp (聯電).
Following the expanded investment, Epistar’s investment in the Chinese joint venture will total US$27.5 million, with its stakeholding increasing to 55 percent from 50 percent, the filing said.
Shares of Epistar edged down 0.97 percent to NT$102 yesterday on the Taiwan Stock Exchange. So far this year, the stock has dropped 15 percent, underperforming the TAIEX’s 8.22 percent rise over the same period, the stock exchange’s data showed.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS