Whoa! Philips selling LED arm !

[billw]

"Dutch electronics giant Philips on Tuesday said it was selling a majority stake in its LED and car lighting arm to a consortium led by China-based GO Scale Capital investment fund in a deal worth $2.8 bn."

http://news.yahoo.com/philips-sell-major-stake-led-car-lighting-arm-060651818.html

 

[Mr Floppy]

Yeah, funny move by Philips but these days they are all about margins. It is a shame because even some of their cheap electronics are quality compared to some.

 

[idleprocess]

Last year they spun off the lighting business from the rest of Philips, so selling off parts of the lighting business is not terribly surprising.

 

[slebans]

Philips CEO has stated publicly that the company is moving towards a focus on their Healthcare products and services.

What is more interesting about the sale is that the Chinese government may have made a giant step in solving the LED patent issues facing their local LED manufacturers.

http://www.ledinside.com/news/2015/..._lumileds_might_solve_china_led_patent_issues

 

[bose301s]

Last year they spun off the lighting business from the rest of Philips, so selling off parts of the lighting business is not terribly surprising.

No they didn't, they announced they wanted to divest some of it but have not done anything as of yet.

They also announced their plan to sell Lumileds way back in early 2014 or late 2013.

 

[sinner-cpf]

Most if not all, of their electronics are now manufactured in China.. Clever business I must say and for obvious reasons.

 

[SemiMan]

Most of everyone's is ....

 

[bose301s]

Philips doesn't really make many/any electronics anymore, they're like GE in the appliance and electronic market or Toshiba in the TV market, they license the name to a manufacturer to use, but they are no longer made by Philips.

 

[Anders Hoveland]

I suspect the executives at Philips have come to the conclusion that the LED market will not continue to expand as fast as was previously expected, and competition among different manufacturers has been fierce. Typically if a corporation believed one of its companies had huge potential, they would not be seeking to divest themselves from it.

 

[Bronco]

I suspect the executives at Philips have come to the conclusion that the LED market will not continue to expand as fast as was previously expected...

Interesting thought and you may well be right. At the same time though, doesn't it in some ways seem that LED technology - after many years of toiling away in the lighting industry shadows - is finally poised to start dominating the home and commercial lighting market? Certainly for us flashaholics, LED development stagnation has been the reality for the last couple of years - at least compared to the heady days of the mid to late 2000s. But half the bulbs sold in Home Depot today are LED based - a reality which stands in stark contrast to what we saw even just a year ago.

 

[SemiMan]

Interesting thought and you may well be right. At the same time though, doesn't it in some ways seem that LED technology - after many years of toiling away in the lighting industry shadows - is finally poised to start dominating the home and commercial lighting market? Certainly for us flashaholics, LED development stagnation has been the reality for the last couple of years - at least compared to the heady days of the mid to late 2000s. But half the bulbs sold in Home Depot today are LED based - a reality which stands in stark contrast to what we saw even just a year ago.

Fixture revenue will increase and Philips is not selling its lighting business but the LED and Auto LED business.

LEDs are already becoming commoditized and unless you are willing to put the money into the CAPEX, then you are quickly behind on cost structure. That seems to be more the realm of pureplays (Nichia, Epistar, Seoul), and/or companies with big semi concerns (Samsung, LG). Automotive doesn't appear to be inline with general Philips marketing efforts. They is no solution sell/pull-through versus selling into a home or business ecosystem.

Semiman

 

[slebans]

LEDs are already becoming commoditized and unless you are willing to put the money into the CAPEX, then you are quickly behind on cost structure.
Semiman

The CAPEX issue is further exacerbated by the >50% MOCVD subsidies provided by the Chinese government for local business. In terms of profitability, many Chinese firms receive direct subsidies to offset operating costs.

The Chinese government has repeatedly stated its intentions to own the LED market.

As to Anders' assertion that the LED market is not expanding as fast as predicted - I really do not know where he is getting his information from. For those who do not follow the market closely, even a cursory Web search would show the market is experiencing tremendous growth.


http://www.digitimes.com/news/a20150316RS400.html

http://www.energy.gov/sites/prod/files/2015/02/f19/lee_global-mfg_sanfrancisco_2015.pdf

 

[SemiMan]

Anders just makes up stuff....

 

[calmoptic43]

Well, almost all companies rely to China's production lines. It is not surprising then that another companies similar to Philips will do the same move.