I, Dr. Bulb, love learning about LED technology, but sometimes the business side of lighting is interesting as well.
First, Toshiba’s American Lighting division pulled out of the market, deciding to largely focus on its domestic market in Japan. Recently, Samsung followed suit by exiting the LED lamp market and focusing on its domestic market in Korea, even after identifying its LED lighting sector as a key growth area just four years ago. Will this trend continue?
Many manufacturers of traditional lighting and manufacturers of electronics have entered the LED market. Some companies are involved in single areas, only manufacturing components such as LED chips or LED engines, while others are involved in multiple areas. As of late, companies that have entered in multiple areas are retreating back to core competencies. The strategic retreat means Samsung will have more of its LED component capacity available for other applications, including its internal displays market as well as external merchant lighting sales.
How will the shakeup affect the industry? It could cause some manufacturers to leave the market altogether, but likely it will be like throwing a rock in the ocean. There may be a ripple, but ultimately it doesn’t make a large impact. There are many manufacturers at every level, and obviously not everybody can win. Samsung’s competitors will continue with business as usual. There are a lot of changes in the lighting industry, but the LED market will continue to grow, efficacy will increase, and prices will fall. The market will be the survival of the fittest. With only the best LED manufacturers in the market, this could only be a positive thing for consumers.