Slowdown seen in LEDs
Mark LaPedus
8/12/2010 1:49 PM EDT
eetimes.com
SAN JOSE, Calif. - There appears to be a sudden slowdown in the cell-phone, PC and other product segments-a trend that impacts chip makers.
Now, there is a slowdown in one of the hottest markets to date: LEDs. Based on Cree Inc.'s results this week and other trends, analysts are worried about the segment.
''Cree indicated that general lighting demand continues to be strong and channel inventories are benign. However weakening LED TV demand trends along with a seasonal Europe is impacting its growth prospects for the September quarter,'' said Hans Mosesmann, an analyst with Raymond James & Associates, in a report.
''The issue at hand is the sudden slowdown in the LED 'display' markets – a one-quarter phenomenon or one that is multi-quarter in nature? More importantly, are the general lighting markets for Cree’s LED sales immune to weakness in display markets? Our view is that the display markets are set for a multi-quarter over-supply dynamic set in motion by both China cash subsidies for LED tool production, and by Samsung’s ability to very nearly be self-sufficient in LEDs used for its LED-TVs,'' he said.
''In the general lighting markets we do subscribe to the notion that these markets have a distinct set of design dynamics that are different from the LEDs used in display markets. However, given our view that Cree has likely over 60 percent sales exposure to Asia (non-Japan), we believe the prospects of a glut in LEDs will depress general lighting LED markets for Cree,'' he added.
LED device and product specialist Cree this week announced record revenue of $264.6 million for its fourth quarter of fiscal 2010, ended June 27, 2010. This represents a 79 percent increase compared to revenue of $148.1 million reported for the fourth fiscal quarter last year and a 13 percent increase compared to the third quarter of fiscal 2010.
GAAP net income for the fourth quarter increased 445% year-over-year to $52.8 million, or $0.48 per diluted share, compared to GAAP net income of $9.7 million, or $0.11 per diluted share, for the fourth quarter of fiscal 2009.
For fiscal year 2010, Cree reported revenue of $867.3 million, which represents a 53 percent increase compared to revenue of $567.3 million for fiscal 2009. GAAP net income increased 402 percent to $152.3 million, or $1.45 per diluted share, compared to $30.3 million, or $0.34 per diluted share for fiscal 2009.
“Fiscal 2010 was a great year for Cree and the LED lighting revolution,” stated Chuck Swoboda, Cree chairman and CEO, in a statement.
For its first quarter of fiscal 2011 ending September 26, 2010, Cree targets revenue in a range of $270 million to $280 million with GAAP net income of $52 million to $56 million, or $0.48 to $0.51 per diluted share.
The LED market is slowing down. There are also weak sales and inventory concerns among Taiwan ODMs, which provide a pulse regarding the overall IC market.
A Wall Street analyst lowered 2010 revenue and earnings estimates for Intel Corp. Tuesday (Aug. 10), saying checks in the Taiwan PC supply chain indicated that order rates from the PC end market deteriorated sharply during the last part of July.
Total IC supply chain inventories grew 10 percent in the second quarter compared to the first quarter of the year, raising fears of downward pressure on semiconductor gross margins and future revenue declines, according to a preliminary second quarter inventory analysis by a Wall Street analyst. |
