Huge Corporations Cancel LED Businesses One after the Other

Huge corporations are reducing their LED businesses one after the other due to bad profitability that is caused by oversupply. It seems that LED businesses are faced with limitations.

Iljin Group is in the midst of liquidating LED chip and package businesses. Iljin LED filed for rehabilitation proceeding to Seoul Central District Court on the 18th and its fate is now in the hands of Seoul Central District Court rather than Iljin Group.

Iljin LED is a company under Iljin Materials, which is a secondary battery business, and it is heard that Iljin Group has decided on rehabilitation proceeding so that its holding company Iljin Materials would not be financially affected by this. After being established in 2012, Iljin LED had never made surplus in any year.

SKC is planning to absorb SKC Lighting, which is a LED lighting business, and this merge is expected to be finished by March of 2016. SKC Lighting was established in September of 2011 because SKC thought that LED light markets would continuously grow. However it has remained as a business department instead of a separate corporate because it could not overcome its poor performance.

“By reducing unnecessary resources and using SKC’s personal and material resources, SKC is planning to aim for management efficiency.” said a person affiliated with SKC.

Samsung Electronics also demoted LED Business Department to a team during its group reorganization in September. LED was one of Samsung’s 5 new businesses. LG Innotec has started this business ambitiously with a goal of becoming the top LED business. However it recently sold Sapphire Wafer business to Sumitomo Chem. in Japan and SSLM which is Samsung Electronics’ joint company.

Global LED markets are continuously growing. Following TVs, lightings are also using LED. However a reason why South Korea’s huge corporations are reducing their LED businesses is due to serious oversupply. As Chinese businesses are mass-producing LED chips, packages, lightings and others with help from Chinese Government, global LED industries are showing signs of ‘Chicken Game’. Many businesses are being reduced or liquidated as profitability becomes worse due to extreme competition.

“Reorganization of markets is currently happening as China is also going through structure adjustment.” said a person from this industry. “It will be hard to avoid any financial hardships for a while.”

Staff Reporter Yun, Kunil | [email protected]