The LED market is weak, many companies such as Osram, Philips and AIXTRON are affected

The downturn in the entire lighting market is affecting companies in all segments of the supply chain. Siemens may postpone its initial public offering (IPO) of Osram. The same market conditions also affect the entire global LED lighting industry.

OSRAM postpones initial public offering

Siemens AG (SIE) in Munich, Germany, recently decided to postpone its initial public offering of Osram, which was originally scheduled for fall this year. It is reported that due to the slowdown in the growth of the solid-state lighting industry and the impact of global stock market weakness, OSRAM will not go public through IPO at this time.

Like the global economy, the demand for LED and solid-state lighting products has grown less than expected this year. The oversupply of LED-backlit TVs has led to a drop in the market price of LEDs. At the same time, new entrants to the Asian market are also putting pressure on the prices of LED components and solid-state lighting fixtures. These factors have affected OSRAM's IPO time. However, in a news report last week, Siemens stated that it will not give up the originally planned IPO, but it did not specify the time to market, saying that it will depend on "the stability of the market situation."

Slowdown in Philips Lighting Growth

The slowdown in the growth of the industry not only affects OSRAM. Royal Philips Electronics released its results for the second quarter of 2011 on July 18, reducing its composite annual growth forecast for the global lighting market from 2011 to 2015 to 5-7%, and the forecast released last year was 7-9%.

Frans van Houten, president and chief executive officer of Royal Philips Electronics, said in July this year: “Philips Lighting Sales increased by 4% over the same period of last year, LED business increased strongly by 21%, but overall, this quarter's lighting The performance was not satisfactory."

On an event held in London, UK on September 13, Philips executives provided a copy of the company’s latest lighting and consumer data. Philips Lighting said its Lumileds company’s sales have fallen due to reduced display sales. However, its overall LED-based sales in the first half of 2011 increased by 24% compared to the same period in 2010.

AIXTRON Releases Revised 2011 Guide

Last week, MOCVD equipment manufacturer AIXTRON SE of Germany released a new revenue forecast for 2011, which is expected to have a revenue of 6-650 million euros this year and a gross margin of 25-30%. Prior to this, the company’s estimated revenue was 8-9 billion euros, with a gross margin of 35%.

It is reported that the company has received feedback from several customers, especially Asian customers, requesting that the delivery date of the MOCVD system be postponed until 2012. AIXTRON pointed out that the fragility of the short-term economic recovery has received increasing attention, coupled with the rapid decline in LED end-market prices, which has caused purchase orders to be shelved and delivery delayed. On September 16th, AIXTRON's Nasdaq stock price closed at 16.61 US dollars, the lowest stock price in 52 weeks, during which the highest stock price was reached in February this year, 45 US dollars.

Instruments' stock rating, Veeco is also a manufacturer of MOCVD equipment and also a competitor to AIXTRON. Therefore, on September 16 Veeco's share price fell to $30.51, a 47% drop from the high of $57.67 in May this year.

Wafer Photovoltaic Slows MOCVD Mounting Speed

According to an article published by Digitimes, Epistar will start its Epicrystal company, an LED joint venture in Changzhou, China, on September 23. Taiwan Jingyuan Optoelectronics holds 60% of Epicrystal's shares. The Changzhou plant is one of the three joint ventures established by Jingyin Optronics in mainland China, and it was the first to start operations.

The new plant has the capacity to install 60 MOCVD equipment, but due to the market downturn and sluggish demand growth, the plant will only install 10 MOCVD equipment by the end of this year. Digitimes's article shows that due to changes in government incentive programs, LED companies in Mainland China have slowed the procurement of MOCVD equipment, but Epistar's plan may not be directly affected by changes in these incentive policies, because before this, crystal Yuanguang’s subsidy application has passed.