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GE Lighting taps LED market through partnerships with local firms

By Kim So-hyun

Light-emitting diode is like hydrogen-powered cars for the lighting industry.
One day, energy-efficient LED lighting will replace all fluorescent lamps.
 
Inefficient incandescent bulbs will soon be nonexistent in Korea as the government banned their production and sales from next year, as in many other parts of the world. 

But for now, the LED lighting industry is just blossoming, with government offices taking up most of the local demand. 

The Korean government is replacing old lighting equipment in public offices with LED lamps made by only small- and medium-sized companies with local production facilities.

“This is why we are working with local SMEs to produce LED lighting products together and help them explore overseas markets,” Kim Ki-jung, chief executive of GE Lighting Korea, said in an interview with The Korea Herald.

“Hundreds of firms with experience in semiconductors or electrics jumped into the LED business thinking it will be the golden goose. Currently, there are about 200 local companies with proper LED lamp production facilities, and about half of them are expected to shut down in the next five years.”

Because the LED business requires a lot of investment to keep unveiling new models, it is hard for small firms to stay afloat for long, Kim added.

GE makes all of its lighting products in the U.S. or China. Even most Korean manufacturers have moved their production bases to China, Thailand or Vietnam for cost competitiveness.

Hyosung Electric Industrial, the only homegrown company that manufactures fluorescent lamps here, has been GE’s partner for the past 10 years.
GE brings in core components for LED street lamps and exterior lighting to assemble them in Korea through partnerships with local firms. 

Its headquarters also directly purchases components from Korean firms, or GE Lighting Korea finds promising companies here and applies GE’s technological or quality control knowhow to make GE brand products for the Korean market. If the products turn out to be successful in Korea, they are sold abroad through GE’s global network.

“Because Korea has the highest safety and energy efficiency standards for lighting products, more expensive components compared to other markets are used for products sold here,” Kim said.

In addition to fluorescent lamps, LED lamps and modules, GE sells high intensity discharge lamps (mostly used in high-end shopping malls), halogen, automotive and specialty lamps for use in commercial, industrial and sports facilities such as stadiums and golf courses as well as in homes or for architectural lighting.

“Sales of GE Lighting Korea have grown by about 12 percent on annual average for the past five years mainly because we launched more high value-added products,” Kim said.

“Whereas our main item in the past was fluorescent lamp, we are now selling more high value-added products such as HID and halogen to a wider range of clients including high-end malls.”

The size of the entire Korean market for lighting products amounts to about 300 billion won, and LED accounts for between 10 and 15 percent of it.
As long service life and high energy efficiency (lumens per watt) are the advantages of LED over other sources of light, a technologically strong drive system is a must, according to Kim.

Ever since Thomas Edison developed the first commercially practical incandescent light in 1879, GE Lighting has continued to invent new light sources including fluorescent, halogen, HID and LED.

“GE invented LED as a light source in the 1960s but didn’t commercialize it because it was too costly. Now, semiconductor companies make LED chips, the cost of which has continued to go down, and we put the chips together with the modules we make to produce finished products,” said Kim who joined GE Lighting in 1998.

GE’s European rival Philips, however, sells more LED lamps worldwide thanks to its vertical business line in which it makes everything from chips to finished products.

“Whereas many LED lamp makers often focus on a single measure such as high lumens per watt or life span by sacrificing other qualities of light, GE products boast a balanced quality in light distribution and color rendering as well,“ Kim said. 

The light source after LED is organic light emitting diodes. 

GE has completed its research on commercialization of OLED, and so have other global companies such as Philips and Osram. Samsung has started applying it as the backlight in cell phones.

“But commercialization or mass production of OLED lamps won’t begin in the near future since it is too costly and would be a waste of resources. 

Companies have invested a lot in LED, so LED will be the mainstream source of light for many years,” Kim said.
(sophie@heraldcorp.com)