Component Integration to Reform LED Lighting Products– Interview with TESS Chairman

Thanks to the joint efforts among fellow vendors over cost structure improvement, technology advancement and quality enhancement, the global LED industry has indeed undergone a structural change that marks a big leap as compare with the industry couple years ago.

While technology innovations bring prosperity, irrational price competition amid intensifying competition among vendors also drags margins further down. Customers’ content over a pricing sweet spot is indeed built on the stiff margin pressure among fellow LED vendors. Some have already found no profit by taking channel deployment and marketing costs into cost account.

The downside price spiral drives fellow LED vendors to think out of the box. LEDinside has the opportunity to interview with TESS (Top Energy Saving System) company chairman Wen-Kuei Tsai about his vision over a new industry picture, plus the company’s new product development.



[TESS chairman Wen-Kuei Tsai.]
 

Technology integrationnecessary to secure foothold

Mounting LED production cost is stemmed from marketing, product return and repair along with technology migration, Tsai indicated. Some LED vendors fail to meet certain key technical standards in aspects of luminance, driving circuit design and heat dissipation, resulting a mixed quality as found in the market. As emitting efficiency at LED module and light module enhances over time, vendors’ pursuit for innovations, on the other hand, also intensified price correction pressure for older-generation products, he noted.

In addition to ASP pressure itself, the pace of technology advancement also differentiae vendors. Tradition LED bulb only carries an average life cycle of ~10,000 hours because vendors usually do not have a strict standard selection over materials including LED module, heat sink and power module upon cost concern, Tsai observed. For some poor-quality LED products, it is common to see the interior LED circuitry to have a shorter life cycle than the LED chip itself under intensive use, he pointed out.



 

Common module platform brings new biz opportunity

To counter with the joint pressure from cost and technology migration, innovations are necessary. TESS has devoted four years to develop its new LED bulb that comes with new LED circuitry design. By equipping various LED light source and light module in module form, this new LED bulb not only delivers a more flexible cost structure but also guarantees quality in terms of output frequency, luminance efficiency, power consumption and life cycle, Tsai highlighted.

The new LED bulb outstands itself also because of a much faster product development cycle, Tsai noted. Since the product is compatible with different components, multiple LED bulbs in different standards and appearances are easily derived from the same power module, he explained.

Tsai is confident that more customers will introduce this new LED bulb to replace the traditional power-consuming PAR (Parabolic Aluminized Reflector) lights at office, household and commercial venues, backed by the new product’s outstanding features including high luminance, high efficiency and compact size. The preset impressions of bulky among traditional fluorescent lights, mercury lights and LED bulbs are about to encounter a structural reform, he noted.

To gain stronger penetration in overseas market and pursue for better margin, TESS collaborates with fellow local vendors in R&D and the launch of this common module platform for component integration. Not only profitability is guaranteed, but also product design, R&D and marketing.

To further exercise its R&D strength, Tsai expects to spread the company’s R&D endeavors via marketing products in new channels. The company has kept its R&D and production hub in Taiwan since company establishment in October 2007.  In addition to deployment at overseas market such as Japan, Tsai stressed that TESS also has as high penetration at local Taiwan market. Aside from traditional distribution channels, TESS also draws considerable B2C sales from Internet, backed by its competitive price offering and quality-proven luminance standard.

TESS offers a complete lighting product line up for use in various venues/applications such as household, commercial, public area and photovoltaic (PV)-power LED street lamp.

[LED lighting products will see new horizon on a common module platform, said TESS chairman.]



 

LED light bulb to replace 100w incandescent bulb in 2013

Thanks to consistent cost structure improvement, Tsai expects the traditional 100w incandescent bulb to be replaced by LED bulb as the market mainstream in 2013, in contrast to marketers’ general expectation to see the 60w incandescent bulb to be replaced by 8/9w 1,000Lm LED bulb.

To catch the transition trend, Tsai noted that TESS would continue introducing more LED light bulb with higher voltage and lumen. Following the launch of the preceding generation of 12w 1,000Lm LED light bulb, TESS will soon introduce the new 12w LED light bulb in 1,200Lm plus 15w model in 1,500Lm.

[High-voltage with high Lm LED light bulbs likely to rise as mainstream in 2013.]

 



 

LED forum, December 18

In the upcoming December 18 seminar that hosted by LEDinside, TESS will introduce its new product offering for respective market segments. The new lineup is built on LED big names including Cree, Sharp and Lextar. These big names will also demonstrate individual view on market trend at the seminar.


For more details, please visit the listed link:
http://seminar.ledinside.com/Campaign/2012TESS/TW/index/
 

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