Amidst the current market downturn and the backdrop of corporate transformation and upgrading, LED companies are focusing on their core businesses while continuously expanding their business boundaries by establishing subsidiaries, thus paving new paths for their development. These newly established subsidiaries often reflect the strategic intentions of the companies.
LED companies are actively establishing subsidiaries . According to incomplete statistics, since the beginning of this year, many companies, including Leyard, MLS, BOE, Nichuang, Innolux, and Songsheng, have successively established subsidiaries, covering LED displays, LED lighting, LED packaging, as well as semiconductor equipment, integrated circuits, consumer goods, and biomedicine.
Display field
Both Innolux and Innolux established subsidiaries this year, focusing on the development of Micro LED.
In May of this year, Neptunus Technology passed a board resolution to invest no more than US$19 million (approximately RMB 136 million) to establish a wholly-owned subsidiary in mainland China, strengthening its existing advantages in Taiwan and actively expanding into the mainland China market. On July 22, the mainland China subsidiary was officially established in Kunshan, Jiangsu Province.
The mainland subsidiary of Neptunus Technology will focus on the production and sales of Micro LED panel components and modules, which will help improve the mass production capacity of Micro LED chips, CoC and related modules in the future, and efficiently meet the growing market demand.
In February of this year, Innolux announced the establishment of a new company, Advanced MicroLux, which focuses on the research and development and manufacturing of Micro LED technology, and is making every effort to expand its presence in automotive, large-screen TV and other related fields.
BOE's subsidiary, BOE Crystal, is making a push into the film market. In September of this year, it established a joint venture with Shanghai Film Group to create Shanghai Film Oriental (Shanghai) Culture Technology Co., Ltd. This joint venture combines BOE Crystal's Mini/Micro LED display technology with Shanghai Film Group's cinema and cultural resources to expand the application space of BOE Crystal's displays in the film market.
Leyard has set its sights on overseas markets. In July of this year, it reached a comprehensive strategic cooperation agreement with Saudi Engineering Holding Group (EHG) to jointly establish "Leyard Middle East Company". The new company will not only focus on high-end displays, but also carry out research and development and manufacturing of energy-saving lighting systems. By leveraging the advantages of local partners, it will accelerate its business layout and market expansion in the Middle East.
In the lighting sector, like Leyard, Song Sheng Co., Ltd. is also pursuing a global market layout. In August of this year, Song Sheng Co., Ltd. announced that it plans to establish a wholly-owned subsidiary, Guangdong Song Sheng Import & Export Co., Ltd., with its own funds, with a registered capital of 5 million yuan. The aim is to expand the international sales channels for lighting, electronic products and related equipment, and promote a global market layout.
Xingyu Group established Chongqing Xingyu Automotive Lighting Co., Ltd. primarily to increase production capacity, expand its presence in the Southwest China market, and advance the research and development of new intelligent automotive lighting technologies. The new company covers the manufacturing of semiconductor lighting devices and specialized equipment, which will help Xingyu Group integrate the lighting, semiconductor, and automotive equipment industry chains, making the process from R&D to mass production smoother and enabling better development of its automotive lighting business.
In August of this year, MLS established two subsidiaries, Ledvance (Shanghai) Energy Technology Co., Ltd. and Jiangxi Qilida Electronics Co., Ltd., venturing into the fields of semiconductor equipment and energy technology, as well as integrated circuit business. These moves indicate that MLS is accelerating its diversification strategy, expanding from traditional LED lighting to semiconductors, new energy, and other fields.
At the same time, facing the fiercely competitive lighting market, Jiuliang Co., Ltd. is also seeking new profit growth points by establishing subsidiaries. The newly established investment company will carry out equity investments in the fields of consumer goods, biomedicine, auto parts, new energy and high-end equipment manufacturing, and lay out industry tracks with both economic and social benefits to enhance the company's competitiveness and profitability.
Packaging Field <br /> It is worth mentioning that, in addition to companies focusing on their core LED business, some companies have also entered potentially profitable areas of the LED industry by setting up subsidiaries, such as the automotive LED packaging market.
On July 22 this year, fiber optic cable company Huiyuan Communication announced that it would invest 50 million yuan to establish a wholly-owned subsidiary, Hefei Yuanfeng Optoelectronics Co., Ltd., to build a production line for automotive LED chip packaging and light source modules.
Huiyuan Communication will leverage the resources of its automotive electronics business unit to expand into automotive lighting and related sub-sectors, seeking new business growth points to cope with the slowdown in the growth of its traditional optical cable business, thereby achieving a diversified layout.
Subsidiaries help LED companies expand their business scope
The establishment of subsidiaries by LED companies is a strategic choice under market competition, and several trends can be observed from this.
On the one hand, companies can establish subsidiaries to enter fields with development potential, such as Micro LED, LED cinema screens, and automotive lighting.
For example, in the display field, Innolux and Nextech have each established subsidiaries to concentrate resources on tackling Micro LED technology, striving to gain a competitive edge in technological iteration. BOE Crystal Semiconductor, through a joint venture with Shanghai Film Group, combines display technology with cinema resources to specialize in the LED cinema screen market. Xingyu Automotive Lighting, already focused on automotive lighting, can further optimize its R&D and production layout and strengthen its competitiveness in the automotive lighting sector by establishing a subsidiary.
On the other hand, companies can expand their global footprint by establishing subsidiaries. For example, Leyard partnered with a Saudi company to establish a Middle East company, and Songsheng Group established an import and export company, both in order to accelerate their expansion into overseas markets.
Furthermore, when facing challenges in their core business, establishing subsidiaries across different sectors can help companies find new profit growth points. For example, MLS established a subsidiary to venture into semiconductor equipment and integrated circuit business. Other companies, such as Jiuliang, established investment companies, focusing on high-potential sectors such as consumer goods, biomedicine, and new energy.
It's worth noting that traditional fiber optic cable company Huiyuan Communication has also entered the automotive LED packaging market by establishing a subsidiary. However, despite the considerable opportunities, entering this niche market means facing challenges from existing strong competitors. Currently, packaging companies such as Hongli Zhihui, Nationstar Optoelectronics, LONGi Optoelectronics, Jinko Electronics, and Refond Optoelectronics are also accelerating their expansion into the automotive lighting market.
In terms of operating models, some companies choose to establish independent subsidiaries to have full control over their business, while others establish subsidiaries through joint ventures to combine the advantages of both parties and achieve a "1+1>2" effect.
For example, in the collaboration between BOE Technology Group and Shanghai Film Group, the former provides technology, while the latter provides market and content resources to jointly develop the LED cinema screen market. Similarly, Leyard's establishment of a joint venture in the Middle East allows it to integrate its product technology with the market networks and resources of local partners, thereby better developing the Middle Eastern market.
Summary <br /> Faced with market challenges and industry upgrades, LED companies have been setting up subsidiaries and exploring more valuable areas. These measures demonstrate the resilience and determination of companies to proactively adjust their businesses and build diversified competitiveness in the face of fierce competition.
