Philips actively responds to the rise of Asian LED manufacturers

Following the separate listing of OSRAM (Siemens), another major lighting manufacturer, Royal Dutch Philips, announced the spin-off of the lighting business into a new company on September 23. Prior to this, Philips had already In July of this year, Lumileds, its LED packaging division, and automotive lighting division were independently integrated into the new company.

LEDinside, a researcher of green energy at TrendForce, said that Philips owns the first lighting brand and the highest market share in the global lighting market. However, in recent years, profitability has not been in line with its leadership position. In the face of excessive competition from different industries, EBITA ( Pre-tax pre-amortization and early-earning surpluses are under 10% for a long period of time, especially the challenges coming to Asia. Asian companies have the advantages of lower cost and higher efficiency. They have made full use of the electronics and semiconductor industries. When traditional lighting is gradually replaced by LED lighting, it is gradually eroding the competitiveness of Philips lighting, and forcing Philips to split the lighting business. , adjust the organizational structure and actively respond.

Lighting industry will face a large-scale turnover

The Philips Group has 113,000 employees worldwide and the bureaucratic effect of an overly large organizational structure offsets the benefits of economies of scale. After Osram’s independence from Siemens, it has launched a large-scale layoffs program. It has laid off more than tens of thousands of people in one year, and the spin-off of Philips may start the same layoff process. According to Philips, the new spin-off company will save 100 million euros in costs in the next year, and further reduce the cost of 200 million euros in 2016, which means that talents in the lighting industry will face a new wave of turnover.

Asia-based industry and commerce will have the opportunity to stand up as a shareholder of Philips Lighting

After Philips Lighting and Lumileds are independent from the Group, it will not rule out separate listing. The introduction of other shareholders through listing financing will help reduce the risk of the Philips Group, and the two independent global leaders will have more independence. Decision-making mechanisms to respond to rapidly changing markets.

On the other hand, for many Asian companies investing in LED lighting, Philips has been a foundry or component supplier for a long time, and even a competitor of the lighting circuit. Once Philips releases the shares, these Asian foundries or Competitors will have the opportunity to stand up as shareholders and share Philips' accumulated results over the years.

LED supply chain will not change significantly in the short term

As to whether the supply chain of Philips Lighting, which is most concerned by the LED industry, will change in the future, LEDinside believes there will not be much change in the short term. Since the beginning of last year, LED procurement decision-making dominance has shifted from Philips Lighting to Lumileds to prepare for the listing of Lumileds ahead of schedule. Therefore, there will be no significant changes in the LED supply chain procurement decision in the short period before Lumileds is listed.

Currently, LED manufacturers in the Taiwan region and mainland China are all in Lumileds' foundry supply chain. Once Lumileds and Philips Lighting are independently listed, the new shareholders will have a new wave of reshuffle in the future supply chain.