South Korea challenges the pattern of LED lighting market patent warfare intensified

According to South Korea's "Asian Economy," South Korea's big companies, foreign companies, and small and medium-sized companies have fiercely competed to compete for the LED lighting market.

Foreign companies such as Philips, GE, and Osram and South Korean companies such as Samsung Electronics and LG Electronics competed for technology infringement in order to compete for LED lighting market share.

In addition, Korean SMEs claim that LED lighting is an inherent business area. In order to prevent large companies from entering this market, they have applied to the authorities to request that LED lighting industry be included in the “SME type of suitable industry”.

Foreign companies take the lead in Korean business challenges

According to industry sources, home LED lighting has only been available for one year and three months, but Philips, the world’s number one lighting manufacturer, has introduced three types of lighting products, with prices ranging from 2.5 to 185,000 won. GE Lighting, the world’s first LED company, also launched nine LED lighting products earlier this year. OSRAM also expanded its lighting product showroom in Ansan and plans to fully enter the LED lighting market.

South Korean large companies also followed foreign companies to challenge this market.

Samsung LED has launched 4 kinds of LED lighting products ranging from 20,000 to 30,000 won (10,000 won or 60 yuan) since last August. In early May this year, 60-watt incandescent lamps were introduced at a price of 189 million. won. Sales outlets also expanded from eMart, Digital Plaza to Home Plus, Lotte Supermarket, and Electro Land. LG Electronics also introduced four new products at the end of May. Its sales outlets have also expanded from the "LG Best Shop" to easy-to-buy discount stores. The price of LG's 40W incandescent lamp is 139,000 won, which is the lowest price in the Korean market.

In order to suppress each other, foreign companies and South Korean companies intensified the war between the two sides.

Siemens holds a patent of Osram. In early June, Siemens filed a lawsuit on Samsung and LG for infringement of patents. Samsung LED also filed a lawsuit requesting that it stop infringement of patents and compensate for losses. At the same time, LG Electronics and LG Innotek asked the Korean Trade Commission to ban the import of OSRAM products.

SMEs "Do not enter our field"

In order to prevent large companies from entering the LED lighting market, relevant SMEs are required to include this sector in the "SME category," and large enterprises sing a Taiwan opera.

According to the information provided by the Korean Ministry of Knowledge Economy, there are currently seven large companies engaged in the LED lighting industry in South Korea, and more than 800 small and medium-sized enterprises, but the proportion of large companies in the market has reached 60%, and only 40% of SMEs. Compared with household LEDs, Korean SMEs are more focused on public facilities such as street lamps and building lights. These companies strongly oppose large companies entering this field.

However, large companies believe that small and medium-sized enterprises have no way to accumulate specialized chips and other technologies, but they only engage in the assembly of parts and components. The industry is very fragmented. If large companies withdraw from this area, foreign companies will likely fully take over. A related person in a large enterprise stated that, as in the case of manufacturing street lamps, SMEs generally import chips from abroad and then assemble them. This is totally different from that of large companies.

Eco-friendly LED lighting

The future lighting market will become popular with environmentally friendly LED lighting. Eco-friendly LED lighting does not contain harmful substances such as mercury and mercury. It consumes about 90% less electricity than incandescent lamps and has a life expectancy of up to 50,000 hours. The industry predicts that environmental LED lighting will grow rapidly. This year, the global market will reach 6 billion U.S. dollars. In 2013 and 2015, it will reach 13.8 billion U.S. dollars and 26 billion U.S. dollars, respectively, but its disadvantage is that the prices are relatively expensive.

The Korean government plans to increase the nationwide LED lighting penetration rate to 60% by 2020 and public institutions to 100%. It is reported that last year, the penetration rate of LED lighting in Korea was only 2.5%, so this is a good opportunity for companies.

Companies such as Samsung and LG have already regarded the LED lighting industry as a new driving force that can drive the company’s economic development. Therefore, fierce competition among big companies and foreign companies and SMEs will be inevitable.