“The choice to set up an LED packaging plant in China is because the capacity utilization rate in Penang, Malaysia is close to the upper limit, and China has the advantage of talents and supporting facilities,†said Lin Rongji, the new CEO of OSRAM Opto Semiconductors Asia Ltd., in an interview recently.
The rumored location of the Osram China packaging base that had been rumored was finally settled.
On May 25th, OSRAM Opto Semiconductors signed a contract with Wuxi New District Management Committee to determine its new LED packaging plant in the local area. The relevant person in charge of Osram said that the back-end factory has a total investment of 250 million euros and will be completed and put into production in the second half of 2013. The main business is LED packaging products.
At present, the packaging and testing base of OSRAM LED chips is located in Penang. The new Wuxi plant will mainly expand production capacity and focus on expanding the general lighting, automotive lighting and industrial lighting markets in China.
Lin said that the current OSRAM light source device has a 10% share in the Chinese market. After the Wuxi plant is put into production, it is hoped that Osram's market share will continue to increase.
So far, four of the world's top five LED giants (the other three are Cree, Nichia, Philips) set up factories in China.
In recent years, the LED industry has begun to show a trend of centralized resources, and companies in the industrial chain will choose to cooperate with their own matching companies. Whether it is supply chain links such as raw material procurement, or downstream application customers, they are gathering in leading companies in the industrial chain. The arrival of international large companies in China's domestic market has accelerated the process of industrial chain integration, which will undoubtedly increase the operational risks of domestic SMEs.
Facing local competition
“At present, many customers of the company are scattered around Wuxi, and setting up factories in Wuxi can serve customers more conveniently and quickly.†Lin said that Osram has seen a market trend that LED demand is rising rapidly. In the future, OSRAM will increase its investment in China, the world's largest single lighting market. He revealed that after the new plant is fully operational, OSRAM plans to locate the sales center in Wuxi.
For Osram's choice to settle in Wuxi, Dr. Zhang Xiaofei, Dean of the High-tech Industry Research Institute, praised: "The Yangtze River Delta and the Pearl River Delta have always been the gathering place of domestic LED companies, and they are the preferred areas for international giants to enter the market. â€
At the same time, he also said that most of the domestic extension companies are gathered here, and OSRAM chose Wuxi, which means that it will directly face the positive competition of domestic and foreign chip companies. This also highlights the strength and determination of OSRAM's localization from another level.
Lin said that the Wuxi plant will cover a full range of LED device products from tiny power to 10W high power, and seek diversification, while providing different power products according to customer needs.
Earlier, a data from the official OSRAM showed that the fast-growing Asia region's share of the general lighting market currently accounts for about 35% of the global total, and is expected to increase to 45% by 2020. The Chinese market alone has now exceeded 8 billion euros and is expected to double at least by 2020.
"We will expand our market share in different areas, of which ordinary lighting is the most important." Lin said that the future expansion of OSRAM in the Chinese market will mainly depend on China's domestic demand market.
Since Cree, Nichia and Philips have already set up factories in China, domestic companies have become calmer for the OSRAM LED factory in Wuxi.
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