The backlight market is gradually recovering

Looking back at the LED backlight market in the previous year, the situation is bleak, and the overall profitability is in a state of great decline. However, after the slow climb last year, this year's LED backlight market may usher in a new recovery.

The LED backlight market in the previous year, the rapidly declining product quotation and the demand in the lighting market were not as expected, resulting in gross margins that were completely unprotected. And because of the rapid expansion of mainland LED manufacturers this year, resulting in oversupply, low-priced products but little sales. In addition, the backlight demand market represented by TV has slowed the growth of the backlight terminal market, and the LED backlight market has rapidly declined. This situation continued until last year.

By 2013, the LED backlight market profit began to climb slowly. The main reason is that some factories, especially those in the mainland, have been forced to close down due to poor management, which has alleviated the oversupply situation, and the penetration rate has been rapidly increased due to the already low price. Although this year can not expect the market to have a profitable turnaround, but it has paved the way for the next year's market recovery.

This year, various conditions have shown that the LED backlight market will recover in this year. First, taking TV backlight as an example, the penetration of LED backlights in this market has risen sharply since last year due to the promotion of mainland color TV brands.

By this year, in 2014, LED backlights can basically replace cold cathode tubes in the TV market. Secondly, although the production of LED products has become relatively easy at present, as the quality requirements of consumers are getting higher and higher, the requirements for manufacturers of LED products are getting higher and higher. Those small and medium-sized manufacturers whose technological level is not advanced enough to produce innovative and excellent products will face the situation of successive closures or switching to LED downstream products. The rest will be high-quality large enterprises with high technology content, and will gradually grow. This plays a crucial role in controlling market saturation and improving product quality throughout the market. In the future, enterprises will increasingly focus on innovation, channels and brands, and the market will eventually eliminate most SMEs without capital competition.

A number of Taiwanese LED manufacturers announced revenue data, showing that under the strong demand for backlights, lighting and other products, the industry's off-season in February is not weak, and there is a tendency to enter the peak season in advance. Among them, the chip faucet crystal power due to strong lighting orders, February revenue increased by nearly 5% against the trend in January, setting a new high in the same period of the previous year.

From the recent performance of Taiwan's LED industry chain, upstream chip companies' revenue growth rate generally exceeds the midstream package. In this regard, UBS Securities reported that the oversupply ratio of LED chips has dropped to 15% last year, and it is estimated that only 4% this year, the supply is relatively tight. In the case of promising industry prospects, chip companies have the most flexible performance.

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