Everlight, Taiwan LED packaging company, is going to adjust its shipment proportion going to the handset segment from 40% in 2007 to 33% this year due to weaker demand, according to Everlight chairman Robert Yeh.

Market sources added, with confidence low in the consumer market and China officials cracking down on the white-box handset market, Everlight has decided to adjust its shipments for handset products and focus on backlight applications, outdoor billboards, automobile and other specialized lighting applications. Sources at Everlight believe that demand for China white-box handsets will not recover as much as expected, so negative shipment growth in 2008 for the company is a possibility. Therefore, Everlight will adjust its proportion of production used for white-box handset applications to lower than 5% and the company plans to reduce its shipments of low-cost handset keyboard LEDs to avoid a reduction in its gross margin.

To increase its utilization rate, Everlight has taken a lot of Christmas light orders. Although the related sales can boost revenue, gross margins will take a hit, with market sources estimating the company's second quarter gross margin will be about 27%, down from 29% in the first quarter.