Strengthening its position in the fast-growing LED market, Royal Philips Electronics NV, the parent of Philips Lighting, Somerset, N.J., plans to buy 47 percent of LED manufacturer Lumileds from Agilent Technologies, Palo Alto, Calif., for $950 million.
Based in San Jose, Calif., Lumileds was created in 1999 as a joint venture between Philips and Agilent Technologies to pioneer applications in solid-state lighting for light-emitting diodes (LEDs). The acquisition would give Philips a controlling stake of 96.5 percent. Lumileds employees own the remaining 3.5 percent of shares. Over the last 12 months, Lumileds had sales of $324 million and operating profit of $83 million, Philips said.
Lumileds produces LEDs for automotive lighting, computer displays, LCD televisions, signage, signaling and general lighting. The general lighting applications of LEDs intrigue Philips Lighting and other lamp manufacturers because of their phenomenal life-span, which in some applications can reach 100,000 hours.
Lighting manufacturers are racing to develop LEDs that can produce white light for general interior lighting applications more cost effectively than conventional incandescent, fluorescent and HID lamps. To date, applications have included exit signs and other emergency lighting, traffic signals and automotive lighting that utilize red, green and yellow LEDs.
Because LEDs can be programmed to emit different combinations of colors, lighting designers use them for striking lighting displays in outdoor lighting applications such as building facades, sports facilities and bridges, as well as interior applications in nightclubs, hotels, restaurants, stores and other retail establishments.
According to a Philips spokesperson, Lumileds currently focuses on selling to original equipment manufacturers (OEMs). “They create a LED for a purpose that somebody has requested, or else they develop a market and then go out to OEMs to create the housing for it.
“There’s probably a lot of things on the drawing board that we have not talked about yet and found out about. Now combined with Philip’s intellectual properties, this acquisition will really make this a company on the forefront.”
The Philips Lighting spokesperson added that the market for LEDs is “virtually identical” in size to the conventional lamp market. “It’s about $3.5 billion dollars, so Philips Lighting had to be involved. It was always involved with LEDs through the joint venture and now is even more involved.”