Samsung and LG are downsizing their LED business as the profitability of the business is worsening due to stiffer competition with Chinese companies which are releasing cheaper but similar-quality products. Samsung downgraded its LED division into a team-level unit through its annual reshuffle on December 9.
LG Innotek recently sold its sapphire wafer business to SSLM, a joint venture between Samsung Electronics and Sumitomo Chemical.
After placing intensive focus on the LED area as one of its five new growth engines, Samsung has recently turned its direction.
Samsung Electronics and LG Innotek each ranks No. 3 and No. 5 in the global LED market in sales terms. They, however, remain in the red. The LED market itself continues to expand, with its size likely to reach about US$17 billion, up 9 percent from a year ago, as the demand for eco-friendly lighting continues to grow.
The problem is that the market is now in a state of glut. Market research firm IHS said the global LED market is facing a 23-percent oversupply.
