Samsung Exits Global LED Luminaire Market

News Source: 
Money DJ

Following LEDinside’s earlier report about Samsung Electronics plans of withdrawing from the LED luminaire market earlier this month, a recent report from South Korean media Dong-A Ilbo has offered further details.

Samsung has decided to exit the international LED luminaire market, but will keep business operations running in the domestic market. The company has terminated retail of LED luminaire products in oversea markets, and notified international clients that it will no longer be offering oversea LED luminaire services. The company will keep LED luminaire business operations in the South Korean market because of the small luminaire market size. Therefore, Samsung’s exit from the global LED luminaire market is equivalent to exiting the LED lighting market.

Intense market competition among LED lighting manufacturers, and Chinese manufacturers low-pricing strategies were the main reason behind Samsung’s decision to exit the LED luminaire market, the report quoted a source from Samsung. The company will be turning its focus and  resources to the LED lighting component.

LED modules and components for electronic backlight applications have a 90% revenue share in Samsung’s LED business, the report added.

Impact from Chinese manufacturers was the main reason behind Samsung’s decision to drop less profitable businesses. Chinese consumer electronics manufacturer Xiaomi for instance have been eating away the Korean electronic conglomerate’s market share in the smartphone industry, while other major businesses have also been hit by Chinese vendors’ aggressive strategies, reported Taiwanese-media Money DJ. This perspective was also echoed by some LED industry experts at LEDforum 2014 in Taipei, Taiwan last week.

Samsung listed LEDs, PV cells, automotive batteries, medical equipment, and biopharmaceutical as the second generation businesses in May 2010, which all are facing restructure. Samsung SDI, which heads the group’s PV cell business, ended all silicon related businesses and products, and are focusing on thin-film solar cell products. Additionally, market rumors noted medical equipment arm Samsung Medison might be merged by Samsung Electronics.

Korean think tanks and analysts from organizations including Kiwoom Daishin, HI Investment and Securities all projected many Korean industries including LED will be facing intense market competition from Chinese manufacturers, and face more difficult challenges in 2015, according to a Yonhap News Agency report. The analysts shared their insights at an event organized by Federation of Korean Industries on Oct. 22, 2014.

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