Foreign LED giants to fight Chinese LED companies

As a large number of Chinese manufacturers have invested in the LED industry, LED lighting has entered the Red Sea killing market in advance, especially in terms of low-cost lighting, in order to respond to the low price of LED lighting products, LED specifications gradually move toward standardization, especially in mainland China. LED manufacturers take government subsidies, special funds, and economies of scale to compete in low- and middle-range markets through price and cost advantages. Forcing Osram, Philips, Samsung Electronics and other traditional lighting manufacturers to make big changes to respond to changes in the lighting market.

Siemens spin-off subsidiary Osram is listed in Germany

On July 8, 2013, Siemens formally split off its subsidiary osram in Germany. Analysts believe that after OSRAM will be listed on its own, it will be able to obtain more abundant funds and use a more flexible organizational structure to grasp the opportunities for the rapid spread of global LED lighting. It is expected that OSRAM will increase its efforts to expand the LED lighting market in the Chinese market.

OSRAM, one of the global lighting giants, was originally a wholly owned subsidiary of Siemens. In November 2012, Siemens plans to spin off OSRAM's 80.5% stake in its shareholders and then let OSRAM go public. According to the spin-off plan, one share of OSRAM shares will be obtained for every 10 shares in the hands of existing Siemens shareholders. After the spin-off, Siemens will still hold 17% of the equity of Osram and Siemens Pension Trust will hold 2.5% of the shares.

According to analysts inside the industry, the Siemens system is huge, and the LED industry needs to react quickly. For example, outdoor LED lighting requires high power, and after the indoor market rises, it needs low-power products. After the spin-off, Osram can respond faster to market demand and invest more.

"The LED chip industry is very "burning money."" An OSRAM backbone in China told the newspaper that the OSRAM spin-off has been discussed for three to five years, and finally achieved spin-off listing, which is conducive to OSRAM increasing investment and consolidating the industry. status.

In terms of sales revenue, OSRAM is second only to Philips and ranks second in the global LED lighting industry. The author believes that compared to Philips, OSRAM has a slower pace in China. Although Foshan Lighting has been controlled, the effectiveness is not obvious. In fact, OSRAM’s LED layout in China has accelerated in recent years. The above-mentioned OSRAM introduced in China, said that OSRAM's LED packaging plant in Wuxi is scheduled to start production in October this year; an LED R&D center is also set up in Shenzhen; the production of LED lighting terminal products in Foshan is also coming up.

The author believes that after the spin-off of OSRAM, the competition among several major international lighting giants in China will become more intense, and the pressure on Chinese LED chip companies will increase. "Philips, Osram, Corey and other global LED chip giants want to expand the site, the application market has become the focus of competition. Osram will also strengthen the channel expansion in China's LED lighting market."

Philips Split Division

Philips is the first lighting brand in the global lighting market, but profitability in recent years is not satisfactory. The day the Philips ceo Marriott announced the plan, the company also issued a second profit warning in less than three months. Philips said that the company's operating profit level in the second half of 2014 will be much lower than the same period in 2013. The company said that this happened because, on the one hand, a medical imaging equipment factory in Cleveland, USA, was shut down after investigation by the US Food and Drug Administration (fda), and on the other hand, it was due to the Chinese economy. Slower growth.

According to analysis by industry insiders, the sources of profit for Philips are mainly fluorescent lamps and hid, and the profits are above 50%. However, this year's business has dropped by an average of 30%. Although the LED business makes up part of it, LED's profit is only less than 25%, and even a perfect performance cannot compensate for the pain that LED will bring to Philips. Price, a temporary solution to the problem, doing subtraction is fundamental. Previously, there were also industry media analysis, and its ebita (earnings before tax pre-amortization) remained below 10% for a long period of time, especially for the challenges coming to Asia. Asian companies have the advantage of lower cost and higher efficiency. They have played a full role in the electronics and semiconductor industries. When traditional lighting is gradually replaced by LED lighting, it erodes the competitiveness of Philips lighting and forces Philips to split the lighting industry. Adjust the organizational structure to actively fight.

In the automotive lighting market and consumer lighting market, Philips does not have an advantage. Splitting it is a simple way to keep it simple. At present, in the application market, Philips has focused on smart connected LED lighting systems for home, office, business, and urban lighting. According to ericrondolat, chief executive officer of Philips Lighting Division, “We hope to remain in the leading position in the transition from traditional lighting to digital lighting. At the same time, we will cooperate with other companies in the industry to absorb some of our knowledge and products. Technology to make Philips stronger."

"After the spin-off, Philips Lighting Solutions will try to enter the adjacent upstream and downstream markets, strengthen its existing market position in LED lighting, lighting and smart connected lighting systems and services, and consider adopting other ownership structures as the basis. The various plans for direct access to the capital market. As for how the lighting products business will be separated into a separate legal company related details will be announced until 2015." Philips CEO fransvanhouten said in a telephone conference.

In the era of traditional lighting, Philips established the first position in the industry through continuous leadership in light source and electrical technology. When the era of LED lighting is approaching, its precipitation in LED technology is not sufficient, or it is expected to strive to extend the existing vested interests. Under the state of mind, the development of LED lighting has been pushed forward by the new entrants too quickly. This speed should exceed Philips' own expectations, making it feel a lot of pressure. These companies from the semiconductor industry are eyeing the huge and decentralized application market. They are staking their positions through frequent mergers and acquisitions or the signing of large and small lighting industry partners. Once Philips is opened up in technology, cost-effectiveness, and scale, and its competitors occupy the leading position in the field of chips, Philips will completely lose its core competitive advantage in technology. It is feared that it will not be a downstream lighting company. The case of Nokia, a neighboring country, is vivid and naturally does not want to repeat the same mistakes.

Philips CEO fransvanhouten claimed at the telephone conference: “We are preparing to build Philips for the next century. The independence of our lighting solutions business will better enable the business to expand its global leadership position and be able to acquire More relevant market opportunities. I do appreciate our courage to make this decision, and the current timing is also very suitable for Philips to take the next strategic step.”. He also said: "Great companies need to reshape themselves. We can do it. We can keep it. We can grow. We can maintain success. Although all this requires courage, this is a road we carefully planned." Dun said that Philips and other corporate giants face the same challenges, leading to their slow integration into the new world. He also mentioned Nokia. "We must learn from Finland's lessons."

This scene is strikingly similar to the transition of ibm that year. With the development of new technologies and new applications, Philips has clearly felt the pressure to adjust and transform. In the new start line of LED, the king's scramble to re-start and split it is an important step in its strategic adjustment. It may also be a landmark event in the lighting industry, but whether this adjustment can make this giant enterprise The road to business innovation has become broader, and development has become more flexible and rapid. It is still unknown.

Samsung Electronics withdraws overseas lighting business

Judging from the statistics in 2013, Japan still holds the ears of the LED industry. Its market share is as high as 27%, South Korea is maintained at 27%, Taiwan and the mainland are respectively increased to 16% and 10%, and the United States has a market share of about 13%. In Europe, it is 8%. China LED lighting market, similar to other international companies, will not miss the opportunity of the rise of the LED market at home.

According to Tang Guoqing, Samsung LED has so far signed cooperation agreements with only less than ten companies. The signing of the agreement is just a form. It is more important to instill a concept of promoting green lighting and show that it is determined to do a good job in this industry. It will not be like the previous international giants and domestic companies signed an agreement, the beginning of the storm, but most of them fade out of sight.

China's LED lighting industry is now slowly moving forward with low prices and mergers and acquisitions, but it lacks core technologies for patented technology. In the face of this phenomenon, Tang Guoqing has always emphasized mutual benefit and win-win, sharing products with customers, and maintaining good quality with peers. This industry. He believes that entrepreneurs should be responsible in a responsible manner, first, to be responsible to consumers, so that consumers understand more about LED lighting, do not bring negative impact on LED; second is to be responsible for their own industry, dedication to safeguard the industry, Do more good things.

At present, the domestic LED device market is not only singly and mutually beneficial slogans of Samsung, as well as OSRAM, Philips and Cree and other international giants are eyeing, how in the process of infiltration, from domestic companies, Star, Hongli and now because of equity issues Nara, and other domestic first-tier manufacturers who have suffered a full-fledged decline in profits, will also be another major problem Samsung will face. In the face of these two major problems, Samsung can only rely on the excellent brands and technologies accumulated so far. , but how to cleverly avoid weaknesses, how Samsung LED next step?

Through Samsung’s exit from the LED lighting business, the decision to focus on chip packaging is a good decision. The lighting market's disordered competition has made Samsung's entry into the market both with international big coffee and with Chinese LED prices without any advantage. Focus on LED chip package, for Samsung, does not mean that it lost the LED market. According to industry data, the output value of the LED packaging market reached US$14.6 billion in 2014, and slightly increased to US$15 billion in 2015, with an annual growth rate of only 3.2%. Samsung focuses on this as a participant and leader in the LED lighting market.