A Comprehensive Summary of the Latest Developments from 10 Domestic and Foreign LED Companies
Split evenly between domestic and foreign companies, the editors compile the recent developments of 10 LED companies into "one comprehensive article."
Regarding Chinese LED companies, HC SemiTek announced its plan to acquire MEMS assets for diversified development, planning to enter fields such as the consumer electronics market and industrial applications; Unilumin Technology's subsidiary will also make external investments to establish a participating company, aiming to further build a complete and sustainable ecosystem in the high-end visual field; Snowlight's subsidiary also recently announced the signing of a "Sales Contract" for charging stations, with a contract amount as high as RMB 210 million; Due to the LED industry's downturn in recent years, Taiwanese company Unity Opto announced an adjustment of its operating strategy, shifting toward high-margin lighting fixtures; After successfully listing on the NEEQ (New Third Board), APT Electronics further determined its new strategic development goal, entering the automotive lighting field.
In addition, regarding overseas developments, Philips is holding talks with a US private equity firm regarding the sale of Lumileds, with the acquisition deal seemingly making new progress; Nichia has filed LED patent lawsuits, allegedly targeting LED chip manufacturers; Cree has drawn attention by conducting small-scale layoffs due to LED business performance falling short of expectations; To optimize VR energy consumption, Oculus intends to acquire an Irish LED startup; Osram has successfully completed the acquisition of Novità Technologies, entering the US automotive LED market.
Below, please follow our editor to learn the details.
One Article Covers the Latest Moves of 10 Domestic and Foreign LED Companies
China Section
HC SemiTek: Plans to Acquire MEMS Assets for 1.65 Billion
HC SemiTek recently released its Q3 earnings forecast, predicting that the net profit attributable to shareholders of the listed company for January-September 2016 will be 120 million to 148 million yuan, with year-over-year growth of 1241.00% to 1557.00%, and the company's quarterly net profit will decrease by 0.66% or increase by 41.38% compared with the previous quarter. The announcement on the same day stated that the company plans to issue 237 million shares at a price of 1.65 billion yuan to acquire 100% equity of Hexie Optoelectronics held by NSL and Hexie Xinguang; at the same time, the company will privately issue 28.777 million shares to Hexie Xinguang and the company's Chairman Zhou Fuyun, raising supporting funds of no more than 200 million yuan. According to the announcement, Hexie Optoelectronics itself has no actual operating business, and its main asset is the 100% equity of the target company MEMSIC held through its Hong Kong subsidiary. With June 30, 2016 as the valuation base date, the pre-evaluation value of the target asset Hexie Optoelectronics is 16.6 billion yuan. After negotiation among the transaction parties, the amount of this transaction is 16.5 billion yuan.
According to information, MEMSIC is primarily engaged in the R&D, manufacturing and sales of Micro-Electro-Mechanical Systems (MEMS) products. Its main products are accelerometers and magnetic sensors, widely used in smart phones and many other fields. It was listed on NASDAQ in the United States in 2007, becoming the world's first MEMS (Micro-Electro-Mechanical Systems) listed company. Subsequently, after comprehensive consideration, MEMSIC underwent restructuring, with its original sensor business segment and system integration business segment being split off. After the restructuring, MEMSIC retained only the sensor business. HC Semitek stated that upon completion of this transaction, the company will be able to enter the MEMS sensor field. As a sub-sector of the semiconductor industry chain, this field has application prospects in aviation, aerospace, automotive and many other industries. HC Semitek will use this opportunity to develop the consumer electronics market and industrial applications, further expanding its integrated circuit industry-related business and achieving diversified extension development.
Unilumin subsidiary: Deploying into high-end visual fields such as stage
On October 14, Unilumin issued an earnings forecast, estimating that the net profit attributable to shareholders of the listed company for January-September 2016 would be RMB 125 million to RMB 135 million, a year-on-year increase of 30.80% to 41.31%. The net profit for this quarter increased by 31.10% to 53.14% compared to the previous quarter. The company stated that: 1. Due to the parent company's streamlining of the supply chain, production capacity has been released to a certain extent, and foreign trade sales revenue continued to grow; 2. Changes in the shareholding ratio of wholly-owned subsidiary Radiant resulted in an increase in net profit attributable to the parent company.
On the same day, an announcement revealed that the board of directors at its 13th meeting on October 13 reviewed and approved the "Proposal on the Wholly-owned Subsidiary's Plan for External Investment to Establish a Participating Company". The board unanimously agreed that the company's wholly-owned subsidiary, Shenzhen Radiant Visual Technology Co., Ltd., together with Shanghai Ruili Performance Equipment Co., Ltd. and Mr. Mao Henggeng (a natural person), would jointly invest RMB 40 million to establish a new limited liability company. Regarding the purpose of this external investment, the announcement stated that this joint establishment of a joint venture is conducive to Radiant's active promotion of in-depth deployment in related fields such as stage machinery and stage art performance, and is conducive to Radiant's further building of a complete and sustainable ecological chain in the high-end visual field.
CNLIGHT subsidiary: Obtains RMB 210 million charging pile procurement contract
CNLIGHT announced on the evening of October 16 that its wholly-owned subsidiary, Fushun Optoelectronics Technology Co., Ltd., and Jialv (Beijing) New Energy Automobile Leasing Co., Ltd. signed a "Sales Contract" for charging stations on October 13 in Zhangzhou City, Fujian Province. The contract amount is 210 million yuan, accounting for approximately 26.20% of the company's total operating revenue in 2015.
According to the contract, Jialv New Energy will purchase 20,000 units of FSEV-DCY15/500-A1 mobile DC charging stations from Fushun Optoelectronics, with a settlement price of 10,500 yuan per unit, totaling 210 million yuan. The products will be delivered in batches within 5 years after the contract is signed. CNLIGHT stated that this contract is expected to have a positive impact on the future performance of its subsidiary.
Unity Opto: Adjusting Operating Strategy to Shift Towards High-Margin Lighting Products
Taiwan-based manufacturer Unity Opto has adjusted its operating strategy, drastically cutting its LED bulb shipment targets this year, with estimates showing a sharp 70% reduction starting this quarter, shifting instead to push for high-margin LED lighting products. Unity Opto's Chairman Wu Ching-Hui stated that the LED industry has been tough in the past year or two, but each manufacturer has found its own positioning, and the next one to two years will see a turnaround from the bottom. It is expected that Epistar, Everlight, Unity Opto, and Lite-On will be the last surviving players in Taiwan.
Wu Ching-Hui has set this year as Unity Opto's transformation year, with the benefits of transformation becoming apparent starting from the fourth quarter. He stated that the magnitude of price-cutting competition is terrible, so Unity Opto has initiated its transformation, gradually abandoning the low-end market and turning towards the high-end, patent-focused market, and returning to NB and TV backlighting. He believes that the LED industry has hit its worst point, and the industry will move towards bipolar development between high-end and low-end in the future.
Apt Electronics: Advancing into automotive lighting after listing on the New Third Board
After successfully listing on the New Third Board, Apt Electronics has further defined its new strategic development goals: exploring internationally leading third-generation semiconductor devices and intelligent lighting, automotive lighting product markets, and establishing high-end LED device and light engine lighting product brands. It is reported that Apt Electronics is gradually developing its automotive LED product line, but it is still mainly focused on the aftermarket with a relatively small market share, and entering the OEM market will take time. To date, the company has established a technology and management team composed of international high-end talents, further developing internationally leading technologies and products in the automotive LED field.
Its main products in the automotive LED market include automotive signal lights and headlights, some of which use Apt LED devices. At the same time, it will lay a solid foundation in the following areas to stand out in the automotive lighting field: first, obtaining the TS16949 certification required for manufacturing plants; second, for products, meeting the AEC-Q100/101/200 specifications; third, passing the ISO26262 certification for products. This certification is originally intended for vehicle validation, but if manufacturers pass it at the product level, it will increase competitiveness. Looking ahead over the next three years, Apt Electronics will have an increasing proportion of its output value in these areas, with the potential to develop into a leading industry enterprise.
Foreign Section
Philips: May sell Lumileds to US private equity firm
According to Bloomberg, Philips is in talks with a US private equity firm regarding the sale of Lumileds. After other private equity firms withdrew from negotiations, Apollo is now the most likely buyer. An anonymous source said that although Philips plans to conclude the deal by the end of October, there is no guarantee the spin-off will be successful. Philips spokesperson Steve Klink also stated that Philips is negotiating with interested buyers. Philips spun off its lighting business in May and is now attempting to sell Lumileds to focus on its healthcare business.
Philips CEO Frans van Houten stated that the final sale price is likely to be lower than the price offered by GOScale Capital. According to ING estimates, Lumileds is worth $2 billion. At the same time, some people are beginning to question whether Philips can complete the sale of Lumileds before the end of 2016. If the deal is not reached, it will undoubtedly have an impact on Philips' transformation.
Nichia: Files LED Patent Lawsuit Targeting LED Chip Manufacturers
Nichia, a major Japanese LED manufacturer, requested the Düsseldorf District Court in Germany on September 29, 2016, to issue a preliminary injunction against Mouser Electronics Inc., which has already been served. Nichia stated that the company claims that the model "334-15/X1C5-1QSA" white LED product manufactured by Taiwan LED giant EverLight Electronics Co., Ltd. (EverLight) and distributed by Mouser in Germany infringes Nichia's YAG patent EP936682 (i.e., German patent DE69702929). The Düsseldorf District Court adopted Nichia's claim regarding the infringement of claim 1 of Nichia's YAG patent by the aforementioned product and issued a preliminary injunction on the same day.
At the same time, based on considerations of urgency, the court approved the request without holding a hearing and served it on Mouser on October 7. However, this preliminary injunction is a provisional measure, so Mouser may still declare its objection. Nichia stated that the company will continue to seek protection of its patents and other intellectual property rights, and will take action against infringers in any country where appropriate and necessary. In response, EverLight stated that it will assist customers in raising objections and safeguard customer rights. Not coincidentally, similar to recent legal events, Nichia's LED patent lawsuits against traders, distributors, and even brand manufacturers in various markets strongly suggest targeting competing LED chip manufacturers, and more such cases may emerge in the future.
Cree: Small-Scale Layoffs Due to LED Business Underperforming Expectations
American LED giant Cree has unexpectedly announced layoffs, though Cree stated externally that the scale of these layoffs is very small. According to reports from the US, a small number of employees at the company's Racine, Wisconsin location in the north-central United States have been let go, as a measure reflecting the company's current business situation — namely, that LED sales have fallen short of the company's expectations.
LED chips and LED lighting have been major business areas that Cree has been heavily involved in over the past few years. The company also spun off its power and RF business as Wolfspeed, focusing on GaN Power and RF product fields. Cree previously issued a brief statement but did not disclose further details about the layoffs. The market estimates that the number of layoffs this time should be quite small, but it reflects the reality that Cree needs to control costs. Cree currently has more than 2,500 employees at its headquarters in Durham, North Carolina, USA. The Racine, Wisconsin office was acquired in 2011 when the company purchased Rudd Lighting for $525 million. This round of layoffs also affected a very small portion of Cree's employees at its Durham, North Carolina headquarters.
Oculus: Acquiring Irish LED Startup to Optimize VR Energy Consumption
Recently, InfiniLED, a startup based in Cork, Ireland, successfully developed an energy-consumption reduction technology that can reduce VR device energy consumption by 20 to 40 times. Spun off from Ireland's Tyndall National Institute, InfiniLED has been acquired by Facebook's Oculus. Oculus plans to use this Irish company's technology to optimize the performance of virtual reality devices, and InfiniLED's door sign has already been replaced with the Oculus logo.
InfiniLED is a company spun off from Ireland's Tyndall National Research Institute and University College Cork. It mainly develops a series of LED light-source modules based on the micro-LED technology licensed by Tyndall National Research Institute. The company's investors include Enterprise Ireland, as well as IL Investment Group from Quebec, Canada. Oculus officially launched the Oculus Rift headset to the market this year. It is said that applying InfiniLED's technology can reduce its energy consumption by 20-40 times. This technological breakthrough is very likely to drive the development of the VR field in the future.
Osram: Completes Acquisition to Enter the US Automotive LED Market
On October 4, 2016, Osram successfully completed the acquisition of Novità Technologies. The company is a well-known US automotive LED module manufacturer, whose products are mainly used as tail lights, fog lights, and daytime running lights. Through this acquisition, Osram will further expand its position in the US automotive LED market. It is said that this transaction is an important step in Osram's strategic decision-making, consolidating its leading position in the automotive lighting field while enriching the LED module product portfolio in automotive projects.
Through the acquisition of Novità Technologies, Osram will further advance its own technology and innovation strategy. It is estimated that by 2020, the global LED automotive headlight and taillight module market will grow at an annual rate of 20%. Particularly in the US market, its advantages will boost Osram's local business and contribute to the LED module product portfolio in automotive projects and system businesses. Novità Technologies will be merged into Osram's Specialty Lighting business, which includes the company's automotive lighting as well as professional and industrial application markets.