2014 is about to come to an end. This year, the LED industry has experienced too many unexpected and difficult things. The LED light bulbs invested by Li Ka-shing became popular, Epistar got married, Wang Donglei and Wu Changjiang broke up, GTAT went bankrupt, blue LED won the Nobel Prize in Physics, Philips split up, Samsung withdrew from the global LED lighting market, and the boss of Juliang Optoelectronics ran away...
It is not easy to make LED, but it must be done and cherished. The editor will sort out the major events in the LED industry this year in chronological order.
Cross-border investment: Li Ka-shing and Lei Jun are optimistic about LED lighting
On March 16, 2014, Li Ka-shing chose a Nanoleaf nano-LED light bulb. This LED lamp has remarkable energy-saving effect. It only needs 12W to provide 1,600 lumens of brightness, which is equivalent to a 100W traditional incandescent lamp. It is known as "the most powerful energy-saving lamp in history." After the news came out, many LED lighting concept stocks soared in the Hong Kong stock market. On November 21, Nanoleaf light bulbs were officially launched in Hong Kong.
Coincidentally, Xiaomi has also taken up the idea of lighting. As early as January 2014, there were rumors on the Internet that Xiaomi would deploy smart homes and even develop its own smart lighting products. Until October, Xiaomi released four new smart products, including the smart light bulb Yeelight. This light bulb is manufactured by Qingdao Yeelink Company and can be remotely controlled via Wi-Fi. It has 16 million colors and can change color and brightness according to the scene.
It is really good to invest in existing projects, which can quickly enter the lighting circle. One is an investment expert who has never failed, and the other is an influential figure who has become the leader of domestic mobile phones in just 4 years. Although there are many companies in the cross-border LED industry, the joining of Li Ka-shing and Lei Jun will undoubtedly inject more stimulants into the LED circle, but too much stimulants may not be a good thing, so small fish and shrimps have to be careful.
Tie the knot: Through share exchange, Canyuan becomes a wholly-owned subsidiary of Epistar
On June 30, Epistar Optoelectronics and Canyuan Optoelectronics held a board meeting and decided to exchange 3.448 shares of Canyuan for 1 share of Epistar, making Canyuan a wholly-owned subsidiary of Epistar. As soon as this news came out, the industry was shocked. Foreign investors point out that this merger is a win-win situation. Epistar can use Canyuan to make up for the current production capacity gap, while Canyuan can use Epistar to turn losses into profits.
Not only Epistar and Canyuan have become the focus of the market, but Sanan Optoelectronics has also attracted much attention. Because before this, Sanan Optoelectronics went to great lengths to invest in Canyuan and became the largest shareholder of Canyuan with 19.77% of the shares. Some industry analysts believe that Sanan has been tricked by Canyuan, and Jingdian’s move is undoubtedly a deterrent to the pursuers. Of course, some securities firms believe that this move will be beneficial to Sanan. If Sanan switches to Jingdian shares, Taiwan's policies will be further liberalized in the future, and the company may increase its holdings and become the largest shareholder.
Now, Canyuan has been merged into Jingdian, and all the shares of Canyuan held by Sanan have been converted into 3.1% of Jingdian’s equity. Sanan and Jingdian, the "old enemies", are therefore bound by common interests. It is also worth looking forward to what kind of cooperation they will adopt in the future.
"Brothers" turned against each other: Wang Donglei and Wu Changjiang broke up
On the evening of August 8, NVC Lighting made an announcement that woke up the LED industry, deposing Wu Changjiang as CEO and appointing Wang Donglei as the new CEO. Subsequently, a series of farce battles took place. A physical conflict broke out between Wang Donglei and Wu Changjiang. Wu and Wang quarreled in the distance. The factory stopped working and the headquarters was relocated. Wu was exposed as being involved in three criminal crimes... In the end, Wang Donglei successfully took over as CEO of NVC Lighting, while Wu Changjiang was confirmed to be under criminal detention on December 16, suspected of misappropriating funds.
This may seem sudden, but there are actually traces to follow. As early as July 14, NVC suddenly issued an announcement that Wu’s cronies had completely withdrawn from the boards of directors of 11 subsidiaries of NVC Lighting, and Wu Changjiang himself only served as the executive director of NVC. At that time, many speculations from the outside world were dismissed by Dehao Runda with "normal handover". But now that I think about it, this personnel transfer may be paving the way for the subsequent "removal".
Although NVC Lighting has now calmed down, the crisis caused the factory to suspend production for three months, resulting in huge losses, which may take more time to make up for.
Complementary strengths and weaknesses: CREE invests in Longda, holding 13% equity
On August 27, Taiwanese manufacturer Lextar announced that it had received an investment of US$83 million from CREE, a major American manufacturer, and would hold 13% of the equity in Lextar. Through this capital injection, Lextar will obtain the relevant patent authorization for CREE's LED chips and devices, and CREE will obtain Longda's long-term supply of blue LED mid- and low-power chips. On October 14, Longda held an extraordinary shareholders' meeting and approved CREE's investment proposal. At that time, Longda's stock price suffered a heavy setback, but CREE still supported Longda at a premium of 7.52%, which shows the determination of both parties to cooperate.
LEDinside Chief Analyst Chu Yuchao said that the price competition in the LED industry is quite fierce. Compared with the cost price of Asian LED manufacturers, it is difficult for European and American LED manufacturers to gain a competitive advantage, so they are seeking cooperation with LED foundries. Cree's investment of US$83 million in Lunda is a good example.
Chain effect: Apple abandons sapphire for new phones, GTAT goes bankrupt
On September 10, Apple officially released iPhone6, iPhone6 plus and Apple Watch in the United States. What surprised Apple fans was that the most requested sapphire screen did not appear on the new iPhone, but only the Apple Watch used a sapphire protective screen. After the press conference, Apple’s sapphire supplier GTAT fell 13%. Since then, there have been various speculations about Apple abandoning sapphire, mostly to the detriment of GTAT.
Time passed to October 6, and GTAT suddenly filed for bankruptcy protection. After that, its stock price plummeted, from US$11 in early October to US$0.36, and it officially withdrew from the Nasdaq stock trading market on October 16, US time. GTAT then started a lawsuit with Apple and attributed the bankruptcy to Apple's harsh requirements. In fact, GTAT is a sapphire equipment factory, not a sapphire glass manufacturer. It is indeed a dead end for Apple to find it to produce sapphire screens, and GTAT's bankruptcy did not bring many surprises.
Before the iPhone 6 was revealed, sapphire companies were very popular. Tiantong Co., Ltd., Roxiao Technology, etc. have expanded sapphire production projects, and Southwest Pharmaceutical even spent a huge sum of 4.12 billion yuan to acquire sapphire supplier Oride. After the GTAT incident, these domestic sapphire manufacturers were also hit, and their stock prices plummeted. I'm afraid that when they invested in expanding production, they were all confident that Apple would adopt sapphire screens and drive the sapphire market. But then Apple disappointed their hopes.
Split into two: Philips officially split
On September 23, Philips announced that it would split the group into two companies, one engaged in consumer goods and medical businesses, and the other engaged in lighting business, with the brand remaining unchanged. There are traces of the company's split. As early as June 30, 2014, Philips stated that it would merge its LED components and automotive lighting departments to become an independent company. The subsidiary will operate independently but will also be open to third-party investors. On November 13, foreign media reported that Philips’ plan to spin off its lighting business attracted bidding competition from several private equity groups, with offers as high as 3 billion euros.
Regarding the split of Philips, CEO Van Houten said that separating the lighting solutions business can better expand its global leading position. Wang Fei, an analyst at LEDinside, also shared his own insights and interpreted the underlying reasons for Philips's spin-off of its lighting business from six perspectives. 1) Strategy: Focus on core businesses such as medical and spin off low-related lighting businesses to improve competitiveness; 2) Operations: Save costs through spin-offs and improve the decision-making efficiency of the two new companies; 3) Brand: Subdivided brands can consolidate brand influence in their respective fields; 4) Profit: The company's profitability is stagnant, and the incentive mechanism needs to be changed to restore profitability; 5) Financing: Independent new companies will have better financing capabilities; 6) Risks: Asian manufacturers are rising, and traveling lightly will help improve their competitive position.
The ban on incandescent lamps is back again: my country bans the import and sale of incandescent lamps above 60W
On October 1, my country officially banned the import and sale of incandescent lamps above 60W. Subsequently, a total of 21 cities and counties in the country promised to eliminate incandescent lamps by 2017, which will implement the plan to ban incandescent lamps.
In order to save energy and reduce emissions, many countries around the world, including the United States, Canada, China, South Korea, etc., have sooner or later formulated plans to ban white matter. By 2014, the white ban plans in major countries and regions around the world will begin to take effect in batches, and the world will officially start the LED light source replacement wave. LEDinside estimates that compared with 2013, the global demand for LED bulbs will increase by 86% in 2014, while the demand for LED lamps will increase by 89%.
my country had an incandescent lamp elimination plan as early as 2011. According to the plan, on October 1 this year, my country will ban the import and sale of incandescent lamps of 60W and above. After the ban came into effect, the presence of incandescent lamps in lighting markets across the country decreased significantly, and lighting products were mostly energy-saving lamps and LED lamps. With the price of LED lamps falling and market regulations improving, it is only a matter of time before they replace incandescent lamps and energy-saving lamps.
Day of Glory: Blue LED wins Nobel Prize in Physics
On October 8, three Japanese scientists, Isamu Akasaki, Hiroshi Amano, and Shuji Nakamura, jointly won the Nobel Prize in Physics for their development of blue-light LEDs. This day is their day of glory and a historic moment for the LED industry.
As early as half a century ago, red and green LEDs of the three primary colors appeared. However, blue LED technology has been unable to overcome it for 30 years, so it is impossible to form LED white light lighting. It was not until 1994 that Akasaki Isamu, Amano Hiroshi and Nakamura Shuji worked together to successfully develop high-brightness blue LEDs, which started a new revolution in lighting technology. Compared with traditional lighting, LED lighting fixtures save energy while reducing mercury pollution. They have made great contributions to human health and the environment, and they are well-deserved for winning the Nobel Prize.
However, the result of this award was "complained" by the American physicist Holon Yak who invented the red LED. He believes that the blue LED's winning award insults the scientists who studied red LED in the early stage. However, industry insiders also pointed out that although red LEDs appeared before blue LEDs, blue LEDs are more important than red LEDs. Their research and development are more difficult and their applications are wider. It is the emergence of blue LEDs that led to the creation of white light sources.
Focus strategy: Samsung withdraws from overseas lighting market
On October 27, Korean media reported that Samsung Electronics has decided to completely terminate LED lighting related businesses in overseas markets and has conveyed this message to overseas customers. It is reported that Samsung’s domestic LED lighting business in South Korea will not stop, but due to the small scale of the Korean market, it actually means that Samsung will essentially withdraw from the LED lighting market.
Rumors about Samsung withdrawing from the lighting market have been circulating since early October, but they are just rumors and there is no substantial evidence. Samsung’s response this time also expresses its position: it will only withdraw from the overseas lighting finished product market and will focus on LED devices in the future.
At this point, everyone knows that the core of Samsung’s LED business is undoubtedly LED devices, so which market segment will become the top priority? Guo Zhihao, associate research manager at LEDinside, believes that the future focus of Samsung's LED devices needs to be divided into two levels - "reality and ideality". Samsung wants to enter the lighting and automotive fields, but in reality it can only rely on its own brand's overseas exports to produce backlight devices. In the field of LED lighting, because the prices of domestic packaging devices in China are extremely competitive, and the mainland market does not require patent protection, it is only a matter of time before mainland packaging plants rise. Therefore, the whole situation seems "intricately connected."
The biggest bankruptcy case at the end of the year: Juliang owes a huge sum of money and the boss runs away
On December 6, the news that "Juliang Optoelectronics Chairman Liu Juyong 'ran away' and owed suppliers more than 200 million yuan" was circulated in WeChat Moments and on the Internet.
According to data provided by suppliers, Juliang Optoelectronics and its subsidiaries owe suppliers a total of more than 200 million yuan in payments. The amount owed to chip suppliers alone is estimated to be as high as 50 million yuan. Other suppliers including die-solid equipment manufacturers, testing equipment manufacturers, phosphors, brackets, glue, etc. are all owed varying amounts of money. Faced with such a bankruptcy, most suppliers who are trying to collect money can only swallow their pain.
The wave of running away will continue, so everyone should keep an eye on the payment and collect what is due, otherwise you will accidentally become a "memorial" for cannon fodder.
ANNA