9 November 2011

SemiLEDs’ revenue falls a further 5% due to delayed China lighting demand

For fiscal fourth-quarter 2011 (to end August), LED chip and component maker SemiLEDs Corp of Boise, ID, USA (which has chip fabrication facilities in Hsinchu Science Park, Taiwan) has reported revenue of $5.3m (below the expected $5.5–6.5m). This is down 54% on $11.5m a year ago but down only 5% on $5.6m last quarter (slowing from a 43% drop that quarter). Full-year revenue was $33.9m, down 5.2% on fiscal 2010’s $35.8m.

Founded in 2005, SemiLEDs’ manufactures proprietary blue, green and ultraviolet (UV) LED chips under the MvpLED (metal vertical photon LED) brand for sale mainly to chip-packaging customers in China, Taiwan and other parts of Asia such as Korea, or to distributors who sell to packagers. It also packages some of its chips into LED components for sale to distributors and end-customers in selected markets (mainly for general lighting applications, including street lights and commercial, industrial and residential lighting).

“The market remained challenging in Asia for LED chips and components,” says chairman & CEO Trung Doan. “The China market is not improving due to inflationary and monetary issues together with depressed economic conditions around the world. We continue to see pricing pressure due to the weak demand in the China outdoor street lighting market, together with the overcapacity of backlight that has spilled over to the general lighting market,” he adds. “The ASP [average selling price] erosion is not as extreme as in prior quarters and prices have stabilized somewhat.”

Fiscal Q4 gross margin was negative 93%, compared with +9% last quarter and +53% a year ago. However, margin was negatively impacted by charges of $4.3m for the write-downs of inventory and $1.1m for bad debt reserve.

Net loss was $13.6m, compared to $5.1m last quarter and net income of $5.3m a year ago. Full-year net loss was $16.1m, compared to net income of $10.8m for fiscal 2010. Cash used in operations during the quarter was $2m. Cash and cash equivalents fell from $94.4m to $83.6m.

For fiscal first-quarter 2012 (to end-November 2011), SemiLEDs expects revenue to rebound to $6-7m. Gross margin is expected to remain negative, but net loss should be cut back to $8-8.5m.

“With so much uncertainty, we remain cautious in our near-term outlook but continue to believe in the industry's long-term market opportunities,” says Doan. “When the Chinese government releases funds for the five-year plan, we expect to benefit, given that we are one of the few companies that meets the program’s requirements and that we have local presence with our JV, China SemiLEDs [formed in January 2010 in Foshan, Guangdong Province],” he adds.

See related items:

SemiLEDs’ quarterly revenue drops a further 43%

SemiLEDs revenue drops due to pricing pressure

SemiLEDs’ revenue almost doubles year-on-year

Tags: SemiLEDs

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