The original story broke 16
September, on something called Taiwan Headlines. According to the
article, Taiwan Semiconductor Manufacturing CO (TSMC), the world's largest wafer
foundry service provider, is reportedly in talks with Philips Lumiled Lighting
Company. Notice the name Lumiled, not Lumileds. One would argue that
an article that cannot correctly spell the name of the supposed take-over
company, is not credible.
You can read the article
here, and notice the footer of the article. This wasn't written by some
blogger. It has a copyright from the Government Information Office,
Republic of China (Taiwan). It is a legitimate article from a legitimate
source.
The article continues, "...the merger is likely to be realized soon, because
Philips Lumiled's largest shareholder Philips intends to dispose of the
unprofitable company, which has been severely impacted by the global financial
tsunami since last year." First, in the above sentence, they at least got
the "s" right, but there should not have been an apostrophe. Second,
Philips purchased 47% share of the company in August of 2005 for $950
million. This resulted in Philips owning 96.5% and the employees owning
the remaining 3.5%. In January 2007, Philips acquired the remaining 3.5%
of the company, making Lumileds a fully-owned subsidiary. Philips is not
the largest shareholder, they are the only shareholder.
How can it be that Lumileds is not profitable? President Obama talks about
LED. Governor Schwarzenegger talks about LED. Most of the new
products at LIGHTFAIR were LED. Venture Capitalists have invested millions of
dollars in LED. Jim Brodrick, of the Department of Energy, is only
allowed, BY LAW, to spend time and resources only on solid state technologies
We asked a few experts in our industry and most were not willing to comment on
the record. Howard Wolfman, Principal of LumiSpec did. In an email
to the EdisonReport, Howard said, "I
believe that Lumileds is an integral of part of Philips' plan for a vertically
integrated LED product line and therefore, is not for sale. The rational
for my conclusion is that since LED products will have a significantly longer
life that traditional lighting products, their future increased market share
will reduce the replacement market size for traditional light sources.
This means that a lighting products company needs to maximize its top line and
bottom line with the original sale of products. The best way to do this is
by having a vertically integrated company, e.g. from the die to the luminaire -
including light sources, driver, etc."
If Philips is considering unloading Lumileds, it will send shockwaves
though our industry. Based on two errors in the article, we have to
question its accuracy. We contacted Philips. They were aware of the
article, but will not comment on speculation. Developing....
