Survey Reveals Pessimism about Q4 Optoelectronics Industry Outlook
2012/11/30 | By Ken LiuA survey of 341 Taiwanese optoelectronics manufacturers from the LED (light emitting diode), photovoltaic, LCD (liquid crystal display), and opto-communications sectors, conducted by the non-profit Photonics Industry Technology and Development Association (PIDA), revealed relatively weak confidence in the industry's outlook for this quarter. The median score, on a scale of 0-100, was 42, down from 47 in the last quarter.
The survey questionnaire asked respondents to choose from among seven degrees of confidence: very optimistic (a score of 100), optimistic (85), slightly bright (66), fair (50), slightly upset (33), pessimistic (16), and very pessimistic (0).
Of the 341 respondents, 0.30% felt very optimistic, 6.20% felt optimistic, 14% felt slightly bright, 28.70% felt fair, 32.30% felt slightly upset, 12.30% felt pessimistic, and 6.20% felt very pessimistic.
PIDA project manager Murphy Lin says that the results of the survey suggest that the island's optoelectronics manufacturers are becoming guarded about the direction in which their industry is going. “This survey reflects the rather low confidence of the industry in Taiwan,” Lin comments. “It's not good news, but there are still promising developments in each sector.”
For the LED sector, for example, streetlights offer a good market. The state-run Taiwan Power Corp. recently cancelled a subsidy it had given to city agencies to help pay electrical bills for streetlights, after the central government announced that another planned hike in electricity fees would be delayed because the previous hike had alleviated the losses suffered by the company due to a long-term price freeze. The cancellation is expected to accelerate the move by city agencies to install LED streetlights.
This will encourage local LED manufacturers to compete for public works projects. Since industrial standards for LED lighting have not yet been finalized, the PIDA urges local governments to carry out strict inspection of LED streetlights to ensure quality.
Affordable and Available
Another happy development is that LED-lighting suppliers are making their products more affordable, and are making them available both at brick and mortar stores and on the Internet.
However, consumers have been left confused by the inconsistency of specifications defined by suppliers of 6-12W cool white LED bulbs used as 40-60W incandescent replacements. For instance, LED bulbs designed to replace 60W incandescent bulbs have been labeled by different suppliers with incandescent lumen ratings ranging from 420 to 810.
Insiders emphasize that government regulators should provide clear and consistent LED bulb lumen specifications that precisely match incandescent lumen specifications so that shoddy products will not be able to push quality products out of market.
The PIDA suggests that in addition to providing labels with clear product specifications, manufacturers need to introduce LED bulbs that are much better, in terms of energy efficiency, than compact fluorescent lamps (CFLs) equipped with efficient ballasts.
The association feels that purchases of LED bulbs will likely increase if the government includes the bulbs in a labeling system established by the government to rate electrical products according to energy-saving performance.
For the PV sector, the association observes is that the global marketing emphasis has shifted from Europe to Asia, where mainland China and Japan are the two biggest markets. The association points out that the worldwide solar-energy market will remain anemic for the rest of this year, largely because of slashed subsidies in Europe and a deep recession in the Italian solar industry.
Taiwan's PV industry reached its annual sales peak in the second quarter, thanks mostly to a flood of orders from mainland China after the United States slapped harsh tariffs on solar modules exported from the mainland. The island's industry has resumed its shrinkage in this quarter, however, fueling forecasts of lackluster performance into 2013.
For the island's LCD sector, the outlook is not as bright. Based on manufacturers' responses to the poll, the association sees little chance that Taiwan's LCD industry will see a recovery in revenue this year. The sector's shipments were anemic in the first half this year, and its revenues are forecast to shrink by 8.6% for the year as a whole.
The major drag on demand is the lingering economic sluggishness in Europe, the United States, mainland China, and Japan, which has weakened sales of LCD TVs in those countries.
Small is Beautiful
While large panels for TVs are in low demand, the market for small panels has grown strongly thanks to the spread of smartphones and tablet PCs. In the future, touch-screen, AMOLED (active-matrix organic light emitting diode), and flexible-panel technologies will emerge to compete with LCDs, according to the PIDA.
By 2050, citizens aged 65 or over will account for 37% of Taiwan's total population. According to the World health Organization's (WHO's) definition, this will make Taiwan an ageing society (the WHO sets the minimum percentage at just 14%). The demand for medical care and equipment will increase along with the number of senior citizens. .
The biophotonics-equipment market can be divided into the medical imaginary, medical laser, opto detection, and telemedicine sectors. According to statistics released by Espicom Business Intelligence, a market research firm, the world market for medical equipment will grow to an estimated US$286.2 billion in 2013, up from US$194 billion in 2007, giving a compound annual growth rate (CAGR) of 6.37%.
Imaging diagnostics equipment, including magnetic resonance imaging (MRI), computed tomography (CT), X ray, ultrasound, and electrocardiography devices, accounts for 20% of the market.
In Taiwan, laser equipment was the fifth-largest category of imported medical equipment in 2010, with a value of NT$2.4 billion (US$80 million at NT$30:US$1).
Citing a study by BCC Research, the PIDA says that the global market for medical lasers will rise to US$4.8 billion in 2014, up from US$2.7 billion in 2008, giving a CAGR of 16.1%.
Opto detection equipment includes external diagnostic and diabetic-care gear. The market for external diagnostic equipment, which can form a part of telemedicine care systems, is projected at US$56.3 billion this year. The market for this equipment is controlled mostly by big players such as Roche, Siemens, Abbott, and Philips. For diabetic-care gear, the market potential is estimated at 380 million users worldwide in 2025.
Chart: Confidence in Taiwan's optoelectronics industry
