China's LED factory rises, foreign giants are forced to adjust structure to fight

Since a large number of Chinese manufacturers have invested in the LED industry, LED lighting has entered the Red Sea killing market ahead of schedule, especially in low-cost lighting. In response to the low-cost LED lighting products, LED specifications are gradually becoming standardized, especially in mainland China. LED manufacturers are taking government subsidies, special funds, and economies of scale to attack the low-end market through price and cost advantages. Forcing the traditional lighting manufacturers such as Osram, Philips, Samsung Electronics and other major changes to respond to changes in the lighting market. Siemens splits Osram in Germany on July 8, 2013, Siemens officially split its subsidiary OSRAM in Germany. Analysts believe that after Osram's separate listing, it will be able to obtain more funds and 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 split the 80.5 shares of Osram to shareholders and then let Osram stand alone. According to the spin-off plan, every 10 shares in the hands of existing Siemens shareholders will receive 1 share of Osram. After the spin-off, Siemens will still hold 17 Osram shares, and Siemens Pension Trust will hold 2.5 shares. According to industry analysts, the Siemens system is huge, and the LED industry needs to respond quickly. For example, outdoor LED lighting requires high power, and the indoor market needs low-power products. After the spin-off, OSRAM can respond more quickly to market demand and invest more money. The LED chip industry is burning money. An Osram's middle-level backbone in China told this newspaper that the separation of Osram has been discussed for three or five years, and finally the spin-off of the listing will help Osram increase investment and consolidate its position in the industry. In terms of sales revenue, Osram is currently second only to Philips and ranks second in the global LED lighting industry. The author believes that Osram's layout in China is slower than that of Philips. Although Foshan Lighting has been controlled, the results are not obvious. In fact, OSL's LED layout in China has been accelerating in recent years. The above-mentioned OSRAM introduced in the middle of China that OSRAM's LED packaging factory in Wuxi is scheduled to start production in October this year; LED research and development center is also set up in Shenzhen; the output of LED lighting terminal products of Foshan factory is also coming up. The author believes that after the spin-off of Osram, the competition of several major international lighting giants in China will become more intense, and the pressure on Chinese domestic LED chip companies will increase. Global LED chip giants such as Philips, Osram and Cree want to expand their sites, and the application market has become the focus of competition. OSRAM will also strengthen its channel expansion in the LED lighting market in China. Philips Split Division Philips is the world's number one lighting brand in the lighting market, but in recent years the profitability is not satisfactory. On 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 the reason for this was because a medical imaging equipment factory in Cleveland, USA, was closed after being investigated by the US Food and Drug Administration (FDA), and on the other hand it was derived from the Chinese economy. The growth rate is slowing down. According to industry analysts, the source of Philips' profits is mainly fluorescent lamps and HID, and profits are above 50. But this year, this business has dropped by an average of 30. Although the LED business has made up a part of it, the profit of LED is only less than 25. The perfect performance can't make up for the pain that LED will bring to Philips, reduce the cost, and raise the price. Governing the symptoms is not a cure, and doing subtraction is fundamental. Previously, there was also media analysis in the industry, and its EBITA (early pre-tax pre-tax surplus) has been below 10 for a long time, especially in the Asian challenge. Asian companies have the advantages of lower cost and higher efficiency, and they are fully utilized in the electronics and semiconductor industries. When traditional lighting is gradually replaced by LED lighting, it erodes the competitiveness of Philips lighting, and it also forces Philips to split the lighting business. Adjust the organizational structure to actively fight. In the automotive lighting market and the consumer lighting market, Philips has no advantage, and it is a way to keep it simple and precise. Currently, in the application market, Philips has focused on smart connected LED lighting systems for home, office, commercial and urban lighting. Eric Rondolat, CEO of Philips Lighting, said that we hope to maintain a leading position in the transition from traditional lighting to digital lighting, while collaborating with other companies in the industry to learn something that complements our knowledge and products. Technology makes Philips stronger. The spin-off of Philips Lighting Solutions will attempt to enter the adjacent upstream and downstream markets, strengthening its existing market position in LED light sources, luminaires and smart connected lighting systems and services, and considering each based on other proprietary structures. The program directly enters the capital market. Details on how the lighting products business will be divested into a single legal company will be announced in 2015. Philips CEO Fransvan Houten said at the phone conference. In the era of traditional lighting, Philips has established the industry's first position through continuous leadership in the technology of light sources and electrical appliances. When the LED lighting era is coming, its precipitation in LED technology is not enough, or it is expected to strive to extend the original vested interests. Under the mentality, the development of LED lighting has been pushed forward by the new entrants. This speed should exceed Philips' own expectations and make it feel great pressure. These companies from the semiconductor industry are eyeing this huge and fragmented application market. They are rushing through frequent mergers and acquisitions or constantly signing large and small lighting industry partners. And once Philips is widened in terms of technology, price/performance and scale, and competitors occupy the leading position in the chip field, Philips will completely lose its core competitive advantage in technology, I am afraid it will not become a downstream lighting company. The case of Nokia, a neighboring country, is vividly remembered, and naturally it is not willing to repeat the same mistakes. Philips CEO Fransvan Houten said at a telephone conference: We are preparing to build Philips for the next century. Separating our lighting solutions business will better enable the business to expand its global leadership and gain more relevant market opportunities. I really appreciate the courage to make this decision, and the current timing is also very suitable for Philips to make the next strategic step. . He also said: Great companies need to reinvent themselves, we can do it, we can keep, we can grow, and we can stay successful. Although all of this requires courage, this is a road we have carefully planned. Marriott said that Philips and other corporate giants face the same challenges, which have delayed their integration into the new world. He also mentioned Nokia. We must learn from the lessons of Finland. This scene is strikingly similar to the transformation of IBM that year. With the development of new technologies and new applications, Philips has clearly felt the pressure to adjust the transformation. At the new starting line of LED, the Kings race has resumed and split it. It is a pivotal step in its strategic adjustment. It may also be an iconic event in the lighting industry, but can such adjustment make this giant enterprise The road to business innovation has become broader and more flexible and rapid, and it is still unknown. Samsung Electronics withdraws from overseas lighting business From the statistics of 2013, Japan still holds the head of the LED industry, with a market share of 27, South Korea maintained at 27, Taiwan and mainland increased to 16, 10, and the US market share is about 13 Europe is 8. China's LED lighting market, similar to other major international companies, will not miss the good opportunity to rise in the LED market at home. According to Tang Guoqing, Samsung LED has only signed cooperation agreements with less than ten companies so far, and signing agreements is only a form, and more importantly, instilling a concept of promoting green lighting, indicating the determination to do a good job in this industry. It will never sign an agreement with the international giants and domestic companies in the past. At the beginning of the storm, most of them end up with a fading out of sight. China's LED lighting industry is now slowly moving forward in low prices and mergers and acquisitions. However, in terms of patent technology, core technology is missing. In the face of this phenomenon, Tang Guoqing has always emphasized mutual benefit and win-win, sharing products with customers and maintaining good with their peers. This industry. He believes that entrepreneurs must be responsible for their responsibility. First, they must be responsible to consumers, let consumers know more about LED lighting, and do not have negative impact on LEDs. Second, they must be responsible for their own industries and do their best to maintain the industry. Do more good things. At present, the domestic LED device market is not only Samsung with reciprocal slogans, but also international giants such as Osram, Philips and Cree. How to infiltrate the process from domestic companies such as National Star, Hongli and now due to equity issues The overall decline of profits, such as NVC and other domestic first-line manufacturers to seize the advantage, will also be another big problem that Samsung LED will face. In the face of these two problems, Samsung can only rely on the excellent brands and deep technology accumulated so far. However, how to skillfully avoid weaknesses, what should Samsung LED do next? Through this Samsung's exit from the LED lighting business, focusing on chip packaging decisions, is a good decision. The market for lighting is disorderly competition, and Samsung has no advantage in whether it is in line with international big coffee spelling technology or with Chinese LED price. Focusing on the LED chip package, for Samsung, it 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. In 2015, it grew slightly to US$15 billion, with an annual growth rate of only 3.2. Samsung is also a participant and leader in the LED lighting market. This shows that Samsung's exit from the lighting business is a wise choice.

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