LED revenue slipped out of the top three global OSRAM to regain China leveraging

In the early stages of an industrial development, leading technology and timely market information in the competition in the first place, but when an industry matures, the cost and price issues become very prominent. Even OSRAM (OSRAM, the unless otherwise noted, in particular OSRAM Opto Semiconductors) in such a way as to brand, quality and patent as the core competitiveness of multinational companies has been established, feel from competitors in Asia and bring the price and cost pressures.

Direct investment in China can enjoy the local cost advantage, from the world's largest single LED lighting market is also closer. However, while enjoying the benefits, direct investment also brings the risk of technology spillover, which may lead to the loss of competitiveness and develop a very threatening competitors.

Penang's investment in Malaysia is an example, although OSRAM has a Far East's largest production base, but also cultivate a team of a terrible rival - OSRAM Penang factory established the bright home. To know that OSRAM had established production base in Asia, choose Penang instead of China, probably is that after the assessment for the plant in Malaysia also can cover the Far East market but the risk spillover is less than China.

Hold on investment has been China technology spillover and risk deeply worried, decided the production base in Wuxi, reflects today's OSRAM also have to think how to improve cost competitiveness in maintaining the existing product advantages at the same time.

Siege of high-end market

OSRAM is clearly aware that things have been quietly changing. In May 21st Wuxi held a news conference in Germany OSRAM factory production Limited by Share Ltd chairman and CEO Dane (Wolfgang Dehen) claimed that "OSRAM Opto Semiconductors to maintain second of the global market in the first position, the company is a Japanese company. And ranked third, fourth, the company of the fifth, their ranking is often changing, OSRAM has remained at the level of the second. We are confident that we will continue to maintain our competitive edge in this area. "But also admitted in the past time, the competition in the field of LED is more and more intense", "market share in the Asia Pacific region is lower than that of OSRAM in the global market share due level".

Yes, in the past time, OSRAM has long been the world's second place in the LED industry, but the threat is getting closer. With the rapid development of LED lighting and backlight market, Asian and North American rivals have achieved a corner overtaking. The German executive is clearly a reference to the gas research institutions still remain in the OSRAM report expired, second of the world's old glory. In fact, according to LEDinside statistics, Samsung LED in 2011 with the rise of the backlight market beyond the machine OSRAM, pick the two crown, and by the year 2013, CREE is to borrow the lighting market, into the top three. LEDinside latest research report shows that global LED revenues, OSRAM has ranked fourth.

Source: LEDinside 2014 China LED Packaging Market Research Report

The reason for all this is that OSRAM has been not enough attention to the rapid growth of China's LED lighting and backlight market strategic misjudgment. The lack of cost competitive products too, although there are patent escort, there are tens of thousands of hours of low degradation of stable performance, high efficiency is inferior to men, but apart from demanding high standards of the automotive lighting, in the fierce price competition in the backlight and general lighting market, there are few customers with affordable.

Although OSRAM also thought about ways to reduce costs, such as the use of more cost advantage Gan on Si solutions, such as looking for Ronda and Hongqi foundry, but even OEM, although the cost than OSRAM's own production is low, coupled with marketing costs, the price is still less than Korean manufacturers are competitive, and the quality level is reduced to made in TW.

"Appropriate", this is the official Aldo Kamper evaluation for Wuxi factory investment chief executive of OSRAM Opto Semiconductors Co. ltd.. However, objectively speaking, I think the only evaluation for "not too late", after all, there are so many competitors have been walking in front of the package, Samsung in 2004 will gradually shift production to China, CREE also through the 2006 acquisition of Huagang photoelectric (COTCO) after a series of investment in local enterprises China rooted in China. In the past few years has made considerable progress, OSRAM advantage in the Chinese market is not so obvious.

Breakthrough Road: Leveraging force

Tai Chi Boxing techniques pay attention to leveraging force. If the opponent's powerful offensive tackle inevitably overwhelmed, but through clever moves to resolve the other offensive, use the other power to counter each other. The rise of Asian rivals, there are two major sources of advantage, one is relatively low cost, the market is close to the largest LED from two. If the head and these Asian rivals fight prices, even operational losses, OSRAM will not fight too.

If the plant is in Chinese, and then sold to the local market, so OSRAM can get the opponent and a considerable advantage, such as plus German quality, global patent and international brand advantages of new competitive power can build up again.

Reference CREE example. CREE factory in China in December 8, 2010