Epistar 4Q20 operation may turn profitable, says president

Epistar is likely to see operation swing into profitability in the fourth quarter of 2020 if the impact of the coronavirus pandemic eases off in the third quarter, according to company president Chin-yung Fan.

Epistar suffered net operating loss for the sixth consecutive quarter in first-quarter 2020 at NT$1.241 billion (US$41.2 million).

Because of constrained production in the US and Europe in the wake of the pandemic, demand for LED chips remains weak in the second quarter of 2020 and thus Epistar sees utilization of production capacity fall to about 50% which is expected to be the lowest quarterly level in 2020, Fan said.

Because of the pandemic, global demand for LED chips used in backlighting of smartphones, LCD monitors, automotive displays and LED lighting is expected to be weak in 2020, but that for backlighting of notebooks has been significantly growing arising from increased use of video conferencing, Fan noted. Epistar's operation for the whole year of 2020 is difficult to turn profitable, Fan added.

The pandemic, however, has not affected Epistar's progress in production of mini LED chips, Fan said. Epistar currently has monthly production capacity of 200 million mini LED chips and, if sufficient demand is sure in the third quarter of 2020, the capacity will be expanded during the fourth quarter and the first quarter of 2021, Fan indicated.

Mini LED backlighting is likely to be extended to LCD TVs in 2021, company chairman Biing-jye Lee said. Depending on the screen size, an LCD TV will entail use of 20,000 to 100,000 mini LED chips with 2,000-3,000 local dimming zones, Lee noted. Mini LED-backlit LCD TVs will be better than OLED TVs in display performance and clients have kept down production cost for the former to a level close to that for the latter, Lee indicated.