LED Makers Climb as China Plans to Ban Incandescent Bulbs
November 08, 2011, 3:50 PM ESTBy Zachary Tracer
(Updates with closing share prices in third paragraph.)
Nov. 4 (Bloomberg) -- A Chinese plan to phase out incandescent light bulbs is boosting companies that make energy- efficient replacements.
China will ban sales of incandescent bulbs that use 100 watts or more of power starting Oct. 1, 2012, the official Xinhua News Agency reported today. The ban will be expanded to cover any bulbs that use more than 60 watts in 2014 and to 15 watts in 2016.
Cree Inc., a maker of light-emitting diodes, which provide light using less energy than incandescent bulbs, gained 9.7 percent to $30.57 in New York, the biggest jump since Aug. 10. LED-maker SemiLEDs Corp. surged 31 percent and Veeco Instruments Inc., a maker of equipment for LED manufacturing, climbed 10 percent, Bloomberg data shows.
Cree, based in Durham, North Carolina, made 36 percent of its sales in Hong Kong and China last year, according to Bloomberg data. Its market share in the world’s most populous country may be as high as 80 percent, according to Piper Jaffray & Co.
“Cree’s limited competition in China is due to most domestic manufacturers remaining at least two to three years behind Cree on technology,” Ahmar Zaman, an analyst at Piper Jaffray in New York, wrote in a research note today. “This positions Cree well to benefit from an uptick in general lighting demand.”
In addition to the sales ban, China may offer subsidies to encourage purchases of LED lighting, Zaman wrote.
--With assistance from Clyde Eltzroth in New York. Editors: Will Wade, Randall Hackley
To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net
To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net
