CompoundSemi Online - The Original Compound Semiconductor Industry Newspaper

January 16, 2005...The quiet revelation over the recent winter holidays by Royal Philips Electronics, stating Lumileds Lighting's 2004 revenues is a public information first. As a joint venture, owned 50-50 by Agilent and Philips, Lumileds is able to function as a private company, with no obligation to state its financials. Obviously, Philips is so proud of its offspring, it wants the world to know how well Lumileds is doing. As noted in our Dec. 23rd headline news, for the 2004 fiscal year that just ended for Philips, Lumileds reported sales of $280 million, representing a 43% annual growth, and their net income was $62 million, which as a percentage of sales, represents 22% of sales. $280 million may not sound like all that much in the international corporate realm, but when you consider that the solid state lighting industry is still in its infancy, Lumileds' $280 million equates to pure muscle and brilliance. Lumileds has long been regarded as maintaining the top slot of the Big Five when it comes to high power LEDs bright and long lasting enough to truly replace the classic "Edison bulb" with a solid state device. The top of the line Luxeon now produces up to 120 lumens in white with comparable light output in other colors.

As industry marketing guru (and co-chair/prime point person for our annual Blue spectrum event in Taiwan) Dr. Robert Walker pointed out, Lumileds' growth has been phenomenal. "From being a relative laggard in the blue spectrum LED arena in the 1990s, Lumileds has remade themselves around the High Power LED applications." As a market research consultant to Strategies Unlimited, Bob knows Lumileds well. According to his analysis, Lumileds Lighting, which resides in the same building as one of its parent companies, Agilent (a long-lived/long ruling international giant in conventional LEDs that originated as Hewlett Packard) basically has three sources of revenues: sales of their LED die, Snap LEDs and SuperFlux lines (that are primarily designed for automotive-type applications), and... Luxeon.

Industry estimates are that Luxeon contributed 50% of their $280 million in revenue to its parents' balance sheets. This is up from an estimated 10% in 2002, shortly after Lumileds staked an obvious claim to the High Power market with their Luxeon LEDs. As Bob Walker puts it, "They were on the bleeding edge of this market, and seeded it early-on. They have shown how a company can bring a product to market early, and actually help create a market segment. Luxeon is clearly the engine fueling Lumileds growth and profits today."

According to Bob, as the mobile applications that have fueled Nichia’s, Cree’s, and Taiwan’s growth begin to saturate the market, a new wave of applications are poised to fuel the industry’s growth. These applications are primarily large area LCD display backlights and automotive applications (both interior and exterior). And these new applications play right into the strategies of Lumileds, as well as Osram, Samsung, and LG Electronics.

There's more.... "The continuing growth of niche lighting applications, of the sort done by Color Kinetics and TIR, will also fuel the High Power LED market. China could be an increasingly important end market for these applications, with the Beijing 2008 Olympics adding fuel to the fire, as evidenced by Opto Tech’s recent announcement of a 200 m x 30 m outdoor sign for Beijing – now that's a BIG SCREEN TV!" says Bob Walker. (Note... Bob will be on the program at SU's upcoming Strategies In Light conference Feb. 7-9 in the San Francisco Bay Area)

I'd like to add and underscore that, back when Agilent was part of HP, it was essentially the only non-Asian company to admirably hang in there and compete toe to toe in the conventional LED business with its Japanese counterparts. This time around, in the high brightness LED field, which is quickly moving to a combination commodity and high end business... especially where HB-LEDs apply to solid state lighting applications... Lumileds must be making its parents proud. Philips is one of the world's true international lighting giants. The others are Osram/Sylvania, (which owns Osram-Opto) General Electric, (which co-owns GELcore with Emcore) and it looks like a fourth major powerhouse is probably Matsushita with its Panasonic products. Having parents of the stature of Agilent and Philips, Lumileds has tremendous clout behind them as we're beginning to see with the two parents getting more obviously involved with their offspring, and starting to publicly brag about the kid's performance. I've noted that parents brag when a child is born, and then they quiet down until it graduates from college and gets a real job.

Lumileds has obviously graduated, with honors. Top of the class. And it has a real job, and it's doing that job exceptionally well. Companies like Color Kinetics, TIR and OptoLum, and a myriad of other upcoming, leading edge SSL industry systems integrators, are leveraging Luxeon LEDs into solid state lighting systems that are blindingly bright and clever, enormously more energy efficient than traditional lighting sources, and fashioned into innovative new designs that are selling amazingly well, despite the premium HB-LED based end products must still command. As the SSL supply chain works collectively to improve the die yields and increase wafer sizes and types, and continually improve the packaging, high power white LEDs of the type Lumileds is providing will indeed start to outmode incandescent and other conventional light sources. Just you wait and see. Or better yet... don't sit on the sidelines. Climb aboard the bandwagon! We're in for a great ride.

OptoLum Scores Third Key LED Thermal Managemt Patent and Reports Shipment of Three New Product Lines
LIGHTimes Staff

Nichia Settles with Shuji Nakamura for $8 Million

Finisar to Defend Breach of Agreement Rationale by Infineon to Terminate Sale of Fiberoptic Unit

Philips Crackdown on DVD Royalty Issues in China May Backfire

Analyst Fined $75K for Rumors Involving RFMD and TriQuint