On the flip side, Stifel's Ho noted that the LED sector earnings from the end market vendors have been poor this quarter, showing an inventory glut that has persisted for longer than expected and pricing pressure. The weak earnings from industry bellwether Cree (CREE - Get Report) and from niche player SemiLEDs (LEDS - Get Report) demonstrated this LED sector weakness. The Stifel analyst said that given the sector slump, Chinese companies, which have ravenously been purchasing MOCVD equipment, could put the brakes on regardless of the subsidy situation.Yet in an equipment space like MOCVD tools for LEDs, there is a 6 to 12 months lead-time until orders turn into shipments that can be booked as revenue, and that can often insulate the "arms dealers" from the weakness in end markets. "I'm negative on the space, but the March quarter shipments should track planned revenue and EPS. I'm very cautious on the June quarter outlook," Ho said.