Benefiting from the recovering demand for TV backlighting and general lighting, LED players expect strong performance in the first quarter of 2011 despite seasonality, and some packaging houses expect revenues for the first quarter to increase 10% or more sequentially, while chipmakers remain conservative and expect revenues for the first quarter to remain flat or increase slightly on quarter.

LED packaging house Harvatek's revenues in the first quarter of 2011 are expected to increase 10-15% and exceed NT$1.1 billion (US$37.23 million) due to expanding demand from Japan-based clients.

First-quarter revenues of Unity Opto Technology are also expected to increase by 10-15% as the company's monthly revenues are expected to reach NT$700 million in March due to expanding shipments for LED-backlit TVs, while revenues in February are expected to remain flat or increase slightly as the company has stocked up inventory for the month despite fewer work days.

Everlight Electronics' revenues are expected to return in March and will start volume shipments of LEDs for tablet PC backlighting in March-April. Market sources expect Everlight's first-quarter revenues to increase by 10% sequentially to about NT$4.24 billion.

First-quarter revenues of Ledtech Electronics are expected to increase by 15% sequentially to about NT$400 million amid a return demand for low temperature LED light bars and new orders for LED lighting products.

On the contrary, LED chipmakers are more conservative, Tekcore expects first-quarter revenues to increase 5-10% sequentially amid returning orders from Korea-based clients, while Formosa Epitaxy expects revenues to remain flat sequentially at around NT$1.1 billion in the first quarter.

Market sources estimated that Epistar's revenues for the first quarter of 2011 to remain flat or decrease within 5% sequentially to about NT$4.6-4.7 billion. The chipmaker's January revenues decreased 3.5% sequentially, while February revenues are expected to be affected be fewer work days. March revenues of Epistar are expected to return to peak season-levels with Korea-based clients completing inventory adjustments.