Philips streamlines LED business for automotive customers

June 30, 2014 // By Christoph Hammerschmidt
As LEDs as the lighting technology of choice for cars come of age, the business with them gets more diversified. This is currently the case in the Philips group: Parent company Royal Philips announced that it plans to combine its automotive lighting and its LED component (aka Lumileds) businesses into an own company. The reason is money: While Phillips plans to remain a shareholder, the company also said it will "explore strategic options to attract capital from third party investors" to fund further innovation.

As one of the leading companies in the lighting business, the Lumileds and automotive units, combined in a single but independent company, will have more flexibility to attract investors to fund further growth, said Philips CEO Frans van Houten. Philips Lighting CEO Eric Rondolat added “By combining Philips Automotive lighting and Lumileds, the Automotive lighting customers will benefit from a fully integrated end-to-end R&D and supply chain, enabling the adoption of LED technology in automotive applications.” The new entity will will continue the existing innovation collaboration, the company also said.

Sales of the combined businesses were 1.4 billion euros in 2013. The chief executive officer of the new company will be Pierre-Yves Lesaicherre, the current chief executive officer of Lumileds. The process to combine Lumileds and Automotive into an integrated business within the Philips Group is expected to be completed in the first half of 2015. Costs associated with setting up the combined business are expected to amount to €30 million in the second half of 2014.

Philips is active in automotive lighting since may years; its first headlight LEDs have been introduced already in 2009. The company also put some emphasis in the OLED research. Together with BASF, the company achieved a technology breakthrough towards transparent OLEDs; a possible application field could be sun roofs for cars. In 2013, Philips led an R&D consortium that devised a 3D OLED rear lighting concept for Audi.

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