Lumileds was acquired, China LED industry pattern change?

Jinsha River GO Scale Capital leading, Asia Pacific Resources Development Investment Limited and the Nanchang Industrial Holdings Limited and other Chinese and foreign financial support under the fund mergers and acquisitions, March 31st announced the successful acquisition of shares of Lumileds 80.1% Holland Royal PHILPS company, PHILPS company will retain the remaining 19.9% of the shares. The transaction is valued at approximately $3 billion 300 million and is expected to be approved by regulators in the relevant market in the third quarter of 2015 and will not be completed until the terms of the transaction are confirmed. The new LumiLEDs will include the original LED business as well as spin off from PHILPS group automotive lighting division.

TrendForce's green energy division LEDinside research associate Chu Chao said in the high power LED technology Philips Lumileds has the world's leading flip process. With the advent of LED lighting market, the majority of LED lighting manufacturers prefer medium and small power LED. Due to the small and medium power LED in the price advantage is far greater than the slow growth of high-power LED market, so Lumileds is facing the pressure of declining market share.

On the other hand, the rise of China based Asian LED manufacturers, coupled with YAG's white patent will expire in 2017, Lumileds faces more stringent cost challenges. Although actively looking for OEM production in Asia, but it is difficult to change the fact that the market competition led to a decline in profits, but also one of the reasons for PHILPS to sell Lumileds.

Chu Chao said that after the successful acquisition of Lumileds Jinsha River group, the two major impact on the LED industry:

1 China LED manufacturers have the opportunity to solve the patent problem, cross the overseas market

Lumileds itself is one of the traditional five LED patent manufacturers, coupled with the transfer of the PHILPS group has more than 600 patents to Lumileds of the transaction, so Lumileds has a large number of LED patents. Future Lumileds is likely to enhance the company's operating performance through patent licensing. The original China LED enterprises to go into the market of Chinese patent blockade, now control, can obtain the right to speak in the global competition, it is also possible that Chinese LED manufacturers to solve the patent problem, a good market opportunity foot overseas.

2 Jinsha River group may integrate its resources to increase Lumileds's strategic partner

Jinsha River LED industry investment group in the past, a series of related supply chain, including latticepower (extension), is too light when the core (extension), ashineon (package), Dalian three (LED lighting and heat), sun lighting (LED lighting) and other LED companies. The Jinsha River group holds the absolute dominance of Lumileds, it is possible to integrate its resources, bring into the supply chain Lumileds.

Due to the past Lumileds focus on the production of high-power LED technology, so the face of the rise of small and medium power LED, the majority of these strategies in Europe and the United States by outsourcing outsourcing to enhance the cost competitiveness. LEDinside determine the future model of cooperation does not rule out the expansion of China's strategic partner.

For more information about LED, please click on China LED network or pay attention to WeChat public account (cnledw2013).