Samsung sharply shrinks LED packaging business trend towards overall LED market

Samsung Electronics has significantly reduced its LED packaging business due to the low price of Chinese manufacturers. Samsung’s LED packaging line in the Tianjin factory area in China has been sold to Chinese companies at the end of last year, but in the future, Samsung will still LED chips will continue to be produced; Samsung's LED packaging line is mainly used to process LED chips produced by South Korea's Xingxing Group into lighting and TV backlights, and the sale of the above LED packaging line equipment is expected to generate billions of won. (ie, the sale amount is lower than the book price of the equipment; the loss has been included in the earnings report for October-December last year).

According to reports, Samsung’s related parties revealed that “the old equipment of the LED packaging production line has been sold, and the remaining equipment will continue to be produced”; Samsung’s LED products have been discontinued in October last year due to continued losses in the LED business. In the business, and at the end of last year's structural restructuring, the LED business unit was downgraded to an operation team.

In this regard, LEDinside has verified the headquarters of Samsung in South Korea. The company emphasizes that Samsung has been continuously researching and developing technology since investing in the LED business. The old LED packaging equipment production line, the Korean side evaluation has reached the depreciation period of equipment, so it chose to sell.

At present, Samsung has a certain number of LED packaging production lines in the Tianjin plant in China. It is an LED chip produced by the Korea Xingxing (キフン) business, which is packaged as an LED product for LED lighting and TV backlighting. Among the reports, Samsung pointed out that in the October-December 2015 financial report, it is estimated that the sale of these LED packaging production line equipment, compared with the original purchase price, the sale of old equipment has billions of won. loss. Samsung pointed out that the company will continue to sell LED products and continue to produce with good efficiency equipment.

Samsung first listed LED as one of the company's five new businesses in 2010, and was well bred and developed. In 2011, Samsung strengthened the production of LED components for TV backlighting, and then cut into the fast-growing global LED lighting market. The report pointed out that Samsung has invested a trillion won in LED-related business. However, the business of LED finished products has not been done in October 2015. Currently, LED components are the main components. At the end of 2015, there were also adjustments to the LED business.

At present, the LED market is subject to the low-cost strategy of Chinese manufacturers, and there are many different changes and effects in the market. Even the strong traditional lighting companies such as GE Lighting in the United States, Osram in Europe and Germany, Philips in the Netherlands, and LEDs in Japan Both the factory and the US LED manufacturer CREE are facing different challenges. At present, the LED lighting market is characterized by significant visibility from Japanese companies such as Japan, Osram, GE, Cree, and Philips, as well as China's Mu Linsen and Taiwan's Yiguang. Recently, China's Mu Linsen also bids for OSRAM's lighting business.

As for the LED backlight, due to the improvement of technology, the LED backlight chip used in each LCD TV has also been greatly reduced, which will also cause considerable operational pressure on different manufacturers.

The following is an official statement from Samsung: "Since 2012, Samsung Electronics has been actively developing the next generation of LED technology and supplying LED light sources to the market. This is the company's LED packaging, LED modules and LED optical machines. In order to make Samsung's business run smoothly and maintain operational efficiency, Samsung sold these LED production line equipments that are close to the depreciation period of equipment in January 2016. Samsung will continue to strengthen The company's management efficiency, and continue to promote flexible business strategies to meet the trend of the overall LED market trends."

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