A Brief History of Samsung's LED Manufacturing

The LED industry has undergone a decade of changes, with Samsung and its contract manufacturers mutually benefiting each other.

On December 3, Kim Dong-jun, Managing Director of Samsung Electronics' CSS Business Division, traveled to Guangzhou to present an award to Silicon Energy Optoelectronics, Samsung's LED foundry and packaging plant in China.

Ten years ago, Dr. Tan Changlin, then vice president of Samsung Electronics, saw the global trend of LED manufacturing capacity shifting to China and proposed the "LED contract manufacturing" strategy, looking for potential LED packaging contract manufacturers in China.

At that time, Samsung LED was not considered the world's top LED brand. The global high-end lighting market was still firmly in the hands of the "Big Five".

However, the commercial success of Samsung's "LED contract manufacturing" strategy is undoubtedly impressive.

Over the past decade, driven by its OEM strategy, Samsung's LED division achieved approximately 10 billion RMB in revenue by 2024, propelling it into the top three globally and establishing itself as a leading global brand in LED devices. It enjoys widespread popularity in the high-end LED lighting market, including with major North American manufacturers like ACUITY BRANDS, and has established strong application barriers in niche areas such as sports lighting. Furthermore, it secured a massive order from Tesla in the automotive sector, giving it a leading position in the new energy vehicle boom.

It is reported that ten years ago, there were many domestic LED packaging manufacturers, some of which were of poor quality. Samsung found the right manufacturers to cooperate with and sent senior engineers who graduated from Ivy League universities to work in the contract manufacturers. At that time, the domestic packaging lines were just starting out and the system was not yet complete. They ate and slept with the workers and almost personally helped the contract manufacturers build a world-class production system.

The investment in high-level talent, the high cost of patent maintenance, and the thinning profits due to homogeneous competition, along with the achievements of Samsung LED, constitute the gains and losses of its OEM strategy.

Throughout Samsung's history of LED manufacturing, its relationship with contract manufacturers has been like that of mentors and friends, with each other achieving success.

Over the past decade, Samsung LED's rapid rise has been accompanied by a series of distinctive LED packaging foundries such as MTC and Silicon Power. Silicon Power, which received an award this time, was particularly noteworthy. In its early days, it was not large in scale and its process system was not yet perfect, but it won Samsung's favor with its unique integrated packaging and flexible customization capabilities.

For ten years, we have worked together and achieved mutual success. Samsung has helped Silicon Energy's production system to continuously improve and become more intelligent, while Silicon Energy has also created many blockbuster products for Samsung. These LED products have achieved great market response and commercial success from the moment they are launched, which is why Silicon Energy has always been among the top Samsung contract manufacturers.

Samsung Electronics Managing Director Kim Dong-jun's visit to Silicon Power Optoelectronics to present a cooperation appreciation award was to thank and commemorate the past decade of close cooperation between the two companies. In the subsequent adjustment of Samsung's business layout, it is possible that Samsung will explore higher-level cooperation with the foundry.

Li Ka-shing famously said, "I won't earn the last penny." This reflects a magnanimous business philosophy. Samsung Electronics, as a super-powerful conglomerate, treats both its customers and contract manufacturers with integrity and principle. Even in its decision to withdraw from the limelight, it has paved the way for a more ethical future for the industry.

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