IT Giant Degradation
Samsung Electronics recently told its clients in North America and Europe that it will shut down its LED business in these regions.
The company has maintained its overseas LED sales networks on an OEM basis as parts of its Consumer Electronics (CE) Division. However, it made this new decision based on its determination that the business does not ensure sufficient profitability in developed countries dominated by companies like Philips and Osram, and Chinese manufacturers increasing their presence in emerging markets.
Still, Samsung Electronics is going to continue with its LED lighting business in the Korean market, although LED lighting is one of the business items designated by the government as more suitable for small firms. “We are halting only the overseas sales of LED lighting products and not withdrawing from the LED business as a whole, which constitutes one of our five new future growth engines,” it explained.
The Samsung Group selected LEDs, photovoltaic cells, automobile batteries, medical devices, biotech, and medicine as its new growth drivers four years ago and has concentrated its investment in those fields. However, its photovoltaic and automobile battery businesses have failed to gain momentum. Samsung Electronics sold its photovoltaic cell business unit to Samsung SDI for 161.3 billion won (US$153.5 million) in July 2011. Samsung SDI has never disclosed the sales of the business unit, either.
In the car battery sector, Samsung is falling behind LG. According to Japanese market research firm B3, LG topped the global automobile secondary battery market in 2013 by beating AESC, a joint venture of Nissan and NEC, while Samsung SDI ranked fourth behind Panasonic.