Epistar expects 35% in 3Q10 gross margin

Although Taiwan-based LED chipmaker Epistar will adjust its shipment mix in the wake of a demand slowdown from the LED-backlit TV segment, the company's internal target for third-quarter 2010 gross margin remains at 35%, according to industry sources.

Epistar pointed out that September revenues could be affected due to the adjustment but should at least reach the level of August and gain modestly from that of July. The company expects full utilization of blue LED capacity into September and about 75-85% for red LEDs.

Epistar registered first-half revenues of NT$9.274 billion (US$290.767 million), gross margin of 37.75% and after-tax profit of 2.692 billion or NT$3.5 per share. The company pointed out that orders were in excess of capacity by 30-40% in the first half and expects demand and supply to be more balanced in in the fourth quarter.