News: LEDs
24 October 2024
Samsung exiting mainstream LED market
Market research firm TrendForce notes that, according to a report by China’s CCTV Finance, South Korea’s Samsung Electronics has begun restructuring its business, as the semiconductor division has decided to withdraw from the mainstream LED market, due mainly to the firm’s overall performance falling short of expectations.
According to preliminary unaudited financial results for third-quarter 2024, both profit and revenue fell below market expectations. Sales were KRW79 trillion, up 17.2% year-on-year but below the market estimate of KRW81.57tr. Operating profit was KRW9.1tr, up 274.5% but down 12.8% on the prior quarter, and below analysts’ expectations of KRW11.5tr.
Samsung entered the LED lighting business in 2012 by merging with Samsung LED, but in recent years the business has been gradually losing its competitive edge in the international market, says TrendForce. Although annual sales from this business reached about RMB10.4bn, its contribution to Samsung’s overall sales was too small to ensure the desired profitability.
Samsung has hence decided to divest the LED business to focus more on areas with better growth prospects, such as micro-LED technology and power semiconductors (e.g. power conversion and current control in electric vehicles, smartphones, energy storage, and home appliances).
Expanding power semiconductor business
At the beginning of 2023, Samsung established a special task force for power semiconductors, and by the end of the year it further reorganized its operations, transforming the LED division into the Power Semiconductor Division, notes TrendForce.
At its Foundry Forum in July 2023, Samsung announced that it would launch 8-inch gallium nitride (GaN) power semiconductor foundry services by 2025, targeting applications in consumer electronics, data centers, and automotive markets. Most recently, as part of this strategic plan, in second-quarter 2024 Samsung installed a metal-organic chemical vapor deposition (MOCVD) system from Germany-based Aixtron in its Giheung factory, which specializes in 8-inch wafer foundry.
