主題： UBS Taiwan LED Sector
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簡要

Takeaways from Guangzhou lighting show

**LED lighting may not be a strong demand catalyst until late 2013
We visited the Guangzhou International Lighting Exhibition held from 9-12 June.
Feedback  from  participants  suggested  demand  in  H212  is  likely  to  weaken
(especially  for  TV  BLU)  given  the  weak  macro  outlook.  Although  participants
have not yet turned pessimistic on H212, most suggested they are more hopeful of
government projects, while consumer replacement demand is still uncertain.  

**Shifting from efficiency to cost reduction; penetration could be slow
Feedback from certain industry participants indicated that the sweet spot lm/$ for
packaged LED is 1,000-1,200 lm/$ (vs. current 550-600 lm/$), which may not be
achieved  till  2014.  Meanwhile,  given  the  general  lighting  market  is  fragmented,
some market participants think the LED penetration rate could be slow.

**Less aggressive promotion from global tier-one lighting brands
In  contrast  to  the  strong  promotion  by  local  LED  vendors,  global  lighting
companies are not as aggressive in promoting LED lamps given the conflict with
its  current  CFL  business.  Our  checks  suggest  the  60W  replacement  LED  lamp
(9W) from Philip is still sold at US$20-25 and LEDinside also expects ASP for the
60W  incandescent  lamp  to  drop  to  US$10  in  H113,  slower  than  the  earlier
expectation of late 2012.

**Too early to revisit Taiwan LED sector; maintain Sell on Epistar
For the Taiwan LED sector, we expect limited sales upside catalysts in Q312 given
weakening  demand,  while  margins  could  be  under  pressure  due  to  ASP  erosion.
Although share prices of Epistar and Everlight have corrected c30% from the peak
in 2012, we remain cautious on the sector given the weak H212 outlook.