Philips sells its 80% stake in Lumileds

It's no more high-performance LED manufacturer versus mid-range LED manufacturers in LED lighting business. It is becoming highly competitive and cost-based and is nearly commoditised. The latest indicator of this trend is, Philips has sold its 80% ownership in its LED company Lumileds to GO Scale Capital. GO Scale Capital to pay Royal Philips US$3.3 billion for an 80.1% stake in its automotive lighting and LED components business, and the remaining 19.9% stays under Royal Philips. “Philips Lumileds is the leader in flip-chip technology that makes high-power LED products possible,” said Roger Chu, research director for LEDinside, a division of TrendForce. “However, LED lighting market in general has shifted toward products of lower prices, so most LED luminaire companies prefer to use the standard and mid-power LED components because of their cost advantage.” The TrendForce release states "With standard/mid-power LED being priced competitively, the growth of high-power LED have slowed. As a result, Lumileds has been under the pressure of losing market shares. Furthermore, Lumileds faces immense challenges. The rise of Asian LED manufacturers led by Chinese companies and the expiration of the YAG white-light LED patent in 2017, for examples, are serious cost problems that Lumileds needs to address. When the lighting business was under Royal Philips, there had been eff...