NEW YORK, NY--(Marketwire -09/22/11)- The Paragon Report examines investing opportunities in the LED Sector and provides equity research on Cree, Inc. (NASDAQ: CREE - News) and Veeco Instruments, Inc. (NASDAQ: VECO - News). Access to the full company reports can be found at:
The LED market is facing significant headwinds of late. The current downturn in the LED market is largely due to reduced prices for LED-based TV backlight and lighting systems. This is because of inventory adjustments, and increased competition from more backlight makers entering the LED market. Reflecting on the industry in general, Cree CEO Chuck Swoboda believes the huge increase in chip production to service LED backlighting applications in recent years has put pressure on the rest of the market.
According to IMS' research, backlighting, which ranges across consumer electronics such as flat panel TVs and cell phones, is expected to grow at a mere 2 percent this year, while the general lighting market for LEDs will be the fastest-growing market, up 29 percent. IMS Research's latest "LED Supply and Demand Report" expects longer-term strength in the LED market. The firm estimates 36 percent revenue compound annual growth rate from 2010 to 2015 for packaged LEDs to $6.3B, up from $1.75B in 2011.
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In China, LED demand is on the upswing. However, a sudden surge in government-backed Chinese LED makers has eaten into the market shares held by the likes of Veeco. Last week shares of Veeco fell significantly after another LED equipment maker, Germany's Aixtron SE, spooked investors by slashing its revenue forecast for the second half of the year by nearly 50 percent, on worries about weaker demand from China, a key market.
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