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Taiwan suppliers to benefit from LED technology shift: brokerage
Central News Agency
2014-02-17 12:27 PM
Taipei, Feb. 17 (CNA) Taiwanese suppliers Epistar Corp. and Everlight Electronics Co. are expected to benefit from a technology improvement in light emitting diode (LED) packaging, according to Morgan Stanley. The U.S. brokerage said the increasing adoption of flip-chip LED packaging in direct-lit TV models this year bodes well for leading LED chipmakers and packagers, generating higher average selling price and profit margin from TV backlight applications. The flip-chip LED packaging allows lower LED usage in backlight modules, compared with traditional lateral packaging, and helps reduce the backlight thickness, said Sharon Shih, a Morgan Stanley analyst in Taipei. This gives leading suppliers a greater competitive lead over second-tier players, she said. "Flip-chip LED requires higher capability at both the level of LED chip production and packaging," Shih said.

"Our checks suggest that only leading players like Epistar, Formosa Epitaxy Inc., and Everlight are currently capable of producing and generating higher margin (on reasonable yield)," she wrote in a research note dated Feb. 14. The analyst gave Epistar an "overweight" rating, and Everlight an "equal-weight," saying that the two companies are likely to benefit from the technology shift. According to research institute LEDinside, direct-type LED TVs became the mainstream in 2013 because they use half the number of LEDs compared with edge-type LED TVs. With their lower costs and successful slim design, direct-type LED TVs are expected to make up 60 percent of worldwide LED TV shipments in 2014, surpassing edge-type LED TVs for the first time, the Taipei-based researcher forecast. (By Jeffrey Wu)

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