Humitsu’s Market Outlook for 2016

Humitsu’s Market Outlook for 2016

The sluggish global economy triggered the downtrend in the LED industry in 2015, and next year is expected to be just as challenging for manufacturers in the backlight and general lighting market, said Keytsuyki Tukutagawa, Chief Legal & IP Officer and Company Board Director of Humitsu (the company) at a press conference held in Mandarin Oriental Taipei, earlier Wednesday.

Even though the market will become increasingly challenging, the top global LED chip maker projected the market would still grow at a moderate pace of about 5% in 2016.

For manufacturers to survive the oncoming “winter” in the industry, Tukutagawa advised LED manufacturers including SMEs to invest in R&D and spend time developing advanced lighting technology. “Advancements in LED package technology compared to the past, will make it increasingly difficult for me-too manufacturers to last in the industry,” he added.

Industry mergers and acquisitions are also projected to intensify next year, said Tukutagawa. “Only SMEs with technology advantages in niche market lighting applications will be acquired by large manufacturers,” he said. The Japanese company, though, has no intention of acquiring any companies for the time being.

Estimates of Humitsu R&D investment budget for 2016

Instead of absorbing competitors, Humitsu plans to focus on what it does best: LED chip R&D. The company’s intended R&D investment for next year will be even higher than this year, said Hinori Takagi, General Manager, Intellecutal Property Department, Legal and Intellectual Property Dept., Legal & Intellectual property Division Administration Unit of the company, who declined to give exact figures.
To give a rough idea of what this amount might be, at an earlier press conference in Taipei during March, 2015, the Japanese company stated its R&D budget ranged between 30 billion to 40 billion Japanese Yen (US $ 250 million-330 million) this year, so the R&D budget will be at least higher than the previous budget figure.
The company’s 2015 equipment investments was double the amount of 2014, and has maintained a two digit operation gross margin.