Seamount Technology Company Limited

StrongLED Rumored to Have Acquired Osram OEM Orders

2016-05-21 09:24:12 Seamount Technology Company Limited Read

StrongLED Lighting Systems, a company registered in Cayman Islands, but with operations based in Taiwan and China is rumored to have acquired Osram’s outsurce orders, reported Taiwanese media Commercial Times.

The company will be expanding its production capacity in fourth quarter, and will be strengthening its controller IC R&D capacity. StrongLED is investing in IC semiconductor manufacturing, and has not ruled out the possibility of forming strategic investment alliances in the IC technology sector, said the company Chairman James Chang.

As a smart LED lighting system solution provider, StrongLED has its own lighting brand in China. The company’s smart lighting solution incorporates LED lighting control system, software design, and system integration. The company is one of the top three outdoor landscape lighting manufacturers in China, and is competing against global lighting giants Osram and Philips in the outdoor lighting sector.

Due to intense market competition in China, Osram is rumored to have given competitor StrongLED its OEM orders as part of its plan to form a strategic alliance to compete against Philips together

The company’s orders are relatively stable, but can still be affected by low and peak seasons, said StrongLED Chairman James Chang. To cope with the impact from low seasons, StrongLED will take on OEM orders. StrongLED’s products are about 25% lower than Osram and Philips brands, while OEM orders revenue will make up 5% to 10% of the company’s total revenue in 2016. In the long term, OEM orders will make up less than 20% of the company revenue.

StrongLED’s core technology are LED IC controllers, and system integration, said Chang.

The company expects to finish constructing its new manufacturing facility in Wujiang, which spans 20,000 square meters by fourth quarter this year. The company will complete its phase three production site this year, and aims to acquire an annual subsidy of RMB 5 million (US $ 765,755) from the Chinese government. The new factory will be developing connected lighting, smart lighting products, and gross margin from these OEM orders is expected to reach at least 30%.

Commenting on Osram’s decision to sell its lighting business, Chang noted the German company was not pessimistic about the LED lighting industry outlook, but was focusing its resources on particular products. By separating conventional light sources and its LED Lighting Solutions (LLS), Osram can focus resources on LED IC controllers, system integration and other core technologies. He was upbeat about these niche market developments.

StrongLED became a listed company on the Taiwan bourse at the end of March, following the developments of Chinese government policies outlined in the new 13th Five-year plan that promotes developing renewable energy, carbon emission reduction, and urbanization of small towns. Investors project StrongLED’s revenue in the next three years will increase 20% to 30%, and its revenue is expected to soar 30% to reach NT$ 1.08 billion (US $55.09 million).

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