Osram plans to leave luminaries business, focus on high-growth technology

Osram has announced that it will sell its LED Lighting Solutions department that produces finished LED lights. The company said it will focus on high-growth-potential market — most likely smart LED lighting and the Internet of Things (IoT), although the company did not clearly identify those growth applications. Still, that IoT-focused items have covered the trade fairs of the company at major events this year such as  Light+Building (L+B) and LightFair International (LFI), with solid-state lighting (SSL) opening new doors for growth.



Actually, after our L+B meeting with Osram back in last March, the company appeared to be leaving a position as a LED lighting manufacturer and toward a future supplying enabling technologies and a smart lighting platform to other LED lighting producers. At L+B, Osram introduced its Lightelligence smart lighting platform that was clearly targeted for helping other LED lighting manufacturers bring IoT products to market and to simplify the task for those LED lighting manufacturers or third-party developers in bringing software applications to market.

Still, we did not expect to see Osram clearly exit from lighting this soon. But the company said it has stabilized the LS business unit, making it a good time to divest LS. The company did not mame potential suitors but said it would be making discussions with interested parties and will provide an update on its strategic plans at its Capital Markets Day in coming November.

We assume the company will continue to operate its Digital Systems business unit that includes technologies such as the Osram Optotronic LED driver family — one model of which won an LEDs Magazine Sapphire Award earlier this year. The Digital Systems and LS businesses have traditionally reported income together as the Lighting Solutions and Systems segment.

But the driver business unit, and other parts of Digital Systems, work well with the strategic move toward smart lighting. Osram demonstrated a new wireless-enabled sensor called SensiLUM at the trade fair. The sensor would allow LED lighting manufacturers to easily develop intelligent LEDs. And the sensors connect perfectly to Optotronic LED drivers. 

Osram is also adjusting its positioning, focusing more on high technology fields as part of its new deveopment plan. The financial figures of the Lighting Solutions (LS) business unit, combined with the contribution of the Digital Systems business unit, are captured within the Lighting Solutions & Systems (LSS) reporting segment.

Osram has also invested heavily in the Osram Opto Semiconductors LED manufacturing business. The company had christened the largest 6-in.-wafer-based LED chip factory in the world late last year in Penang, Malaysia. The company clearly sees LEDs as a growth opportunity, especially in the specific applications such as automotive and horticulture in addition to general LED lights.