Edison Opto, a leading LED packaging manufacturer based in Taiwan, projects that the ex-factory price of LED lighting is probably to fall 30% in 2013. The ex-factory price was US$4/W in 2011 and it has fallen to US$1/W in 2012. If the ex-factory price of a 3W MR16 is around US$3, the cost of LED components accounts for about 20%, it means there is limited room for price falls for LED components but it's still very likely to fall in 2013.
 
Industry sources noted that the price drop of LED components has been easing but the price drop per quarter in the second half of 2012 continues to be around 5-10%. This is due to rising competition from China-based LED packaging houses. In addition, due to the debt crisis, demand for LED lighting in Europe has been weak. Nevertheless, demand in Japan in the second half of 2012 continues to increase.
 
Edison Opto stated that due to inventory accounting procedures for the year-end balance sheet, performance in the fourth quarter of 2012 is likely to be flat or show a 10% decrease. Also, demand in the first quarter of 2013 is unclear.
 
To comment on the strategic alliance formed by Formosa Epitaxy and Sanan Optoelectronics, Edison Opto noted that currently, the firm has yet to meet a suitable cooperation partner. The firm plans to continue expanding cooperation with downstream lighting fixture firms, which may include China-based firms.
 
Jason Wu, chairman of Edison Opto noted that Edison Opto will shift focus to integrating resources and plans to invest in up to five downstream lighting fixture partners in 2013.