As a new member of the SEMI Silicon Photonics Industry Alliance (SiPhIA), Brightek is actively expanding its international presence, promoting its latest EVO ICLED products in markets such as China, the US, Germany, and South Korea. Despite lower-than-projected automotive and notebook demand in 2024, the company plans to deliver samples of its next-generation ICLED to automotive customers by year-end, targeting integration into new vehicle models launching by the end of 2025.
Furthermore, the new factory in Nantong is scheduled to begin equipment installation in March 2025, with full-scale production expected to commence in October. Market expectations indicate that performance in 2025 will surpass that of 2024.
General manager CH Tzeng stated that due to ongoing weakness in China's manufacturing and real estate sectors, along with economic slowdowns, Brightek's revenue in the first three quarters showed only a slight increase compared to the same period in 2023. To maintain upward momentum in gross margins, the company is adjusting its product mix and enhancing high-tech content and added-value products. Profitability has continued to show year-over-year growth during this period. The company aims to develop applications for light source transmission and reception, exploring opportunities for integration with silicon photonics technology, which prompted its recent joining of SiPhIA to assess future entry points.
Market estimates suggest that despite fierce competition in China's automotive sector, Brightek could achieve double-digit revenue growth in 2025 through the introduction of new automotive products and sensors, thereby expanding its end-user application domains. This would further increase the proportion of revenue derived from automotive products.
In the first three quarters of 2024, Brightek reported revenues of NT$630 million (US$19 million), with smart sensing products accounting for 57.3% of total revenue, automotive light sources at 39.8%, new display technologies at 2.3%, and other categories at 0.6%. The consolidated gross margin stood at 47.23%, reflecting a year-over-year increase of 1.82%. Operating profit margin was recorded at 17.22%, down by 0.2% year-over-year, while net profit after tax reached NT$116 million, marking a year-over-year increase of 4.13%.
Innovation in automotive solutions
Tzeng stated that while the development of the automotive market in 2024 is moderate with Chinese brands gaining momentum, the company initially expected rapid growth in ICLED penetration rates and improved average selling prices. Nevertheless, 2024 is seen as a pivotal year for ICLEDs. The latest EVO ICLED products are being heavily promoted across China, the US, Germany, and South Korea, significantly increasing technical visibility in the global automotive market. Recently, at the 2024 Electronica in Germany, Brightek unveiled its exclusive UPP color calibration software.
The UPP utilizes algorithms to assist automakers in rapidly and accurately calibrating RGB ICLED colors. When paired with the EVO ICLED products, color calibration speed can improve fivefold, achieving over 99% accuracy, effectively addressing the long-standing challenge of time-consuming color adjustments faced by manufacturers.
Expanding product applications
Given that a single vehicle can contain hundreds of ICLEDs, automakers urgently need solutions to simplify communication between lighting controls. To enhance color richness, suppliers are required to develop more cost-effective lighting control systems, which presents challenges for the efficiency of intelligent LED control and reduces cost considerations for control systems. Brightek plans to provide clients with validation of the next-generation intelligent LED system by the end of 2024, aiming for supply to customer vehicle models by the end of 2025.
Additionally, the ICLED series has found success in various consumer products, including ambient lights for leading South Korean gaming monitors and applications in Japanese pachinko machines.
Smart sensing growth and capacity expansion
In terms of smart sensing applications, Brightek has made significant progress with infrared LEDs (IR LEDs) and other invisible light products, successfully expanding into applications such as smart doorbells and security monitoring. Notably, sales of invisible light LED products are projected to grow significantly in 2024, exceeding a 60% year-over-year increase, with continued growth expected in 2025. Furthermore, there is anticipation surrounding AI PCs to be showcased at CES 2025, prompting Brightek to actively develop new technologies for use in AI notebooks and gaming notebook keyboards, expecting to ride the wave of upcoming replacement demands.
Regarding capacity planning, Brightek's Nantong facility is currently undergoing internal renovations, with equipment installations starting in March 2025, followed by trial production in April and full-scale production slated for October. Capacity from the Shenzhen plant will gradually shift to Nantong, ensuring continuity for existing customers and production capabilities.
Concerning the impact of the US presidential election on industry chain layouts, Brightek indicated that discussions have been held with overseas automotive customers regarding sourcing policies. Customers are focused on whether adequate preparations have been made. Given that Brightek's clientele primarily resides within the Greater China region, the company is considering proactive strategies for third-party locations outside Taiwan and China to mitigate geopolitical risks, with plans to explore potential investment opportunities soon.
