LG Innotek to Phase Out LED Power Supply Units
LG Innotek, a subsidiary of LG Group, has announced its decision to discontinue the production of switching power supply (SMPS) units for LED lighting. This move is part of a broader strategy to focus on more profitable and innovative areas within the electronics sector. The company had been manufacturing these components since 2000, primarily supplying LEDs for mobile devices, backlighting in notebooks, and other lighting applications such as LED signage and TV backlights. However, the LED division has faced declining revenues over the past few years.
According to data from the Korea Financial Supervisory Service, the revenue of LG Innotek’s LED business unit dropped significantly between 2014 and 2017. In 2014, it generated around 1.04 trillion won (approximately $976 million), but by 2017, the figure had fallen to 5.1017 trillion won, marking a 4.18% annual decline. This downturn has led the company to reassess its long-term strategy in the LED market.
The shift comes as LED technology continues to evolve, placing new demands on power drive solutions. While SMPS has traditionally been used to convert AC to DC power efficiently, the industry is now moving toward more advanced and compact power systems tailored for modern LED applications. This change in market dynamics has likely influenced LG Innotek’s decision to exit the SMPS segment.
Meanwhile, another major player in the lighting industry, Siemens, reported strong first-quarter results driven by the sale of its stake in Osram. The German multinational saw a 12% increase in profit, reaching 2.2 billion euros, thanks to the proceeds from selling 17.34% of Osram shares. This transaction marked the end of a long-standing partnership between Siemens and Osram, which had lasted for several decades.
In addition to the profit boost, Siemens’ overall revenue for the quarter rose by 3% to 19.82 billion euros. Despite a decline in its industrial business, the company remains optimistic about future performance, forecasting a profit margin of 11% to 12% for fiscal year 2018 and earnings per share between 7.2 and 7.7 euros.
As both companies adjust their strategies in response to changing market conditions, the global lighting and electronics industries are witnessing a period of transformation and innovation.
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