LED chipmaker Epistar saw its February 2011 revenues drop 1.95% sequentially, while fellow chipmaker Tekcore reported an 12% increase on month.

Epistar has posted revenues of NT$1.36 billion (US$46.25 million) for February, down 1.95% sequentially but up 7.4% on year.

Utilization rate at Epistar remained at around 70% in January-February, and revenues for the first two months of 2011 were NT$2.75 billion, up 7.1% on year.

Epistar noted that the first quarter usually has the lowest quarterly revenues of the year, and current orders for backlighting are better than others in March with better returning demand in February, and with gradually increasing demand for LED lighting, utilization rate is expected to increase to over 80%. Capacity is expected to turn tight in the second quarter of 2011 in response to current demand from clients.

Market sources expect significant growth in Epistar's revenues in March which may increase by over 30% sequentially and about 20% on year to reach NT$1.8 billion.

Looking into the second quarter of 2011, Epistar expects performance to return to peak season levels, and current order volumes have increase by 20-30%, but it will depend on product mix for the company to see a record quarter in the second quarter. If shipment share for LED lighting products increases, it will help to boost revenues and gross margins. Epistar expects LED lighting to account for 25% of its revenues in 2011.

In the second quarter, Epistar is expected to benefit from Korea-based clients placing TV backlighting orders, along with increasing demand from Japan- and China-based vendors, blue LED capacity is expected to reach full utilization, and utilization rate for AlGaInP LEDs is expected to return to 80%. Epistar's revenues are expected to reach NT$1.9-2 billion level in April and NT$5.8-6 billion for the quarter.

Tekcore saw its February revenues increase 12% sequentially and 73.28% on year. Revenues for the first two quarters of 2011 totaled NT$435 million, up 55% on year. Tekcore's revenues are expected to challenge NT$250 million in March and boost the revenues for the first quarter to NT$680 million, up over 10% sequentially.

Orders from TV backlighting clients have significantly improved in March, and Tekcore expects shipments, revenues and gross margin to improve amid the demand for TV backlighting while prices for components such as sapphire substrates continue to drop.

Tekcore entered the LED lighting market in the second half of 2010, and has landed orders for high-power products such as light bars and LED lighting from China, Korea and Taiwan and has started shipments. Market sources estimated the LED lighting market to grow by more than double, and revenues of LED lighting products are expected to account for over 30% of Tekcore's total revenues in 2011.

*Figures are not consolidated
Source: TSE, compiled by Digitimes, March 2011