LED Filament Bulbs Development Barred by Safety Issues

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Korean LED lighting industry characteristics can be summarized in two words, innovative and sustainable, said Guoqing Tang, President, LED Business Unit, Samsung, China, according to hqlednews.com. China’s LED lighting business development can be represented by three words: large scale, pragmatic, and herd mentality.  

Scale, can be defined as using economics of scale model to profit, and surpassing opponents in production capacity. After Epistar acquired FOREPI, the company’s MOCVDs reached nearly 500, and the company’s production capacity is now nearly world number one. The following acquisitions are all examples of implementing economics of scale, Tsinghua Tongfang acquisition of Neo-Neon LED Lighting International for RMB 700 million (US $113.94 million), Furi Electronics merger with MR Photoelectricity, Foshan Lighting’s acquisition with Mont Lighting, and Yaming Lighting’s merger with INESA for RMB 1.59 billion.

Since large sized enterprises can lower costs, it can help companies enter markets with low costs and impact rival markets. However, there are also risks involved, when replacement products emerge, or a downturn hits the market, massive investments spent on the production line can become a company’s burden. Therefore, when companies have large sized advantages, it must analyze the market trends reasonably.

Pragmatic, refers to Chinese LED luminaire manufacturers tend to make products from the aspect as to whether the product is profitable. They rarely will make a conceptual product, or become market leaders that launch next generation products. On the other hand, they also will not invest in products that are unprofitable. Most of the products Chinese LED manufacturers make are already existing market products. It can be said, Chinese manufacturers are very pragmatic and will not invest in unprofitable products.

“For instance, China’s Guzhen Town, located in Guangzhou Province, China, main business is luminaires, which generates a revenue of about RMB 1 billion (US $160 million),” said Tang. “The town’s secondary business, commercial real estate also values about RMB 1 billion, and plans of developing financial business is still underway. A manufacturer is unable to focus on planning, developing, and strengthening their main businesses.”

Herd mentality, refers to Chinese LED industry’s habit of following in other’s footsteps instead of taking the lead. “Many Chinese LED business leaders have said: ‘We won’t be the first to make it. We prefer to be followers before taking the top spot.’” LED filament bulbs are a very good example. Japanese manufacturer Ushio was the first to develop LED filament bulbs that resembled the conventional incandescent bulb. Once Chinese manufacturers realized the bulb demands and profits were fairly good, they quickly jumped in. Manufacturers have completely neglected LED filament bulbs future developments, and changes in market demands. Since everyone else is doing it, it cannot be wrong. This is the classical herd mentality.

“Are LED filament bulbs a step backwards in history or the future of LED bulb developments?” reminded Tang. “There has been different perspectives about this in the LED industry, and this phenomenon should be a sign that LED bulb filaments are insufficient. Manufacturers shouldn’t follow LED filament bulbs blindly, but should consider why they are following this.”

Hong Kong’s DesignLed CTO Xu Zhengrong, who has been in the LED package industry for decades, also was against LED filament bulbs. “LED filament bulbs are not safe, they are unable to pass safety standards,” said Xu. "Besides the U.S. and European markets, even third country markets will not promote this product. Additionally, super low yield rates, and painful manufacturing techniques put into the bulb, makes me think the product is not worth developing in the future. My sources from Philips China and international procurement team have confirmed, Philips will not procure LED filament bulbs. Market rumors that Philips ordered LED filament bulbs are basically false.”   

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