Exploring the Breakthrough Road Lighting Industry Needs to Balance Centralization and Decentralization

According to the data from IMS, according to the 2009 world LED market analysis and survey results, "Seoul Semiconductor" followed the world's three largest LED packaging companies, Japan and Asia, OSRAM Philips, ranked fourth.

Seoul Semiconductor’s management also looks forward to sales totaling US$1.3 billion in 2011, surpassing Philips and ranking third.

If you have an impression on the previous content, you may think that Seoul Semiconductor sounds familiar. Correct! It is because of the Seoul Semiconductor Semiconductor that is being sued for mimicking the technology of Nichia Chemical!

The grudges of Seoul Semiconductor and Nichia Since 2006, patent disputes between Nichia Chemical and Seoul Semiconductor have continued. The lawsuits and counter- lawsuits were filed again and again throughout the United States, Europe, and Asia.

When the lawsuit went into turbulent phases, Nichia Chemical suddenly announced in 2009 that it had signed a "Cross-licensing Agreement" with Seoul Semiconductor and ceased all patent litigation cases in the United States, Germany, Japan, Britain, and South Korea. The parties agree that they can use each other's patented technologies including LED and semiconductor laser technologies. However, the specific content is open to the public.

The industry generally believes that Seoul Semiconductor has achieved a breakthrough in white LED technology by learning and imitating Nichia Chemical (self-developed and successful Acriche semiconductor lighting technology with the world’s brightest white LED of 1201m/W), gaining bargaining capital. Finally, a technology swap agreement was reached.

Seoul Semiconductor publicity, "as proud of our 5,000 package concept technology patents." This is just the result of the technical change and repackaging of other manufacturers.

The development strategy of Seoul semiconductors is inevitably criticized. However, at least as a businessman, they fully realized the great significance of the high ground of technology and pushed into the core of the technology at all costs.

Seoul Semiconductor plagiarized and improved its technology from Nichia Chemical, choosing a similar breakthrough in Nichia's chemistry from the upstream of the industrial chain. Regardless of ethical considerations, such a strategy really grasps the nature of the industry.

The road to success: technology imitation and point-shifting From the perspective of the nature of the industry, traditional Big Three occupiers have the largest market share and mid-to-high-end technologies, while Nichia Chemical has more powerful research capabilities through continuous technological innovation. , increased their own profit margins.

Seoul Semiconductor, however, took a rather controversial shortcut: It fully mimicked the technology of a mature company (Nichia Chemical) and surpassed key technologies to get a stepping stone to the nature of the industry, successfully breaking through the core Manufacturers build industry barriers.

After knowing that Nichia Chemical was under the control of Seoul Semiconductor's new technology, it was forced to take a share and reach a technical swap agreement.

In addition, Seoul Semiconductor continues to try to consolidate its own technology base. It took advantage of its own first-mover advantage and imperfect rules and regulations in the new industry. In December 2009, Posco, a Pohang consortium with strong political power, was introduced. Then it lobbied the Korean government for its proposal for a standard system. Once passed, competitors from various industries are importing LED lighting standards into South Korea. The Seoul Semiconductor Group will be the first choice and will be more likely to be adopted by other countries. In this way, Seoul Semiconductor hopes to gain a technical commanding height globally and put this Maximize technical utility.

Therefore, no latecomers with technology have almost no chance of transcending beyond imitation. Instead, it can imitate existing mature technologies and improve them on the basis to shorten research and development time. This is the advantage of later development.

Seoul Semiconductor has the technical protection of the local government, imitating it, and using its advantage of backwardness to break through technical barriers. This was the same as the beginning of the year when Japanese semiconductor and automobile companies copied European and American design processes.

Therefore, for Chinese companies that are even further behind, the ability of Chinese industry to excel in imitating and transforming will be a feasible way for the company to take the lead and enter the core of the industry.

Even if it is difficult to imitate, it can be acquired like the Taiwanese. After the success of the stage, Yiguang Electronics has neither stopped on its own and does not blindly expand upstream. Instead, it invests strategically in upstream companies and converts the capital obtained in the middle and lower reaches into Control of upstream technological power.

Seoul Semiconductor's "Technology Imitation Route" is applicable to companies that have been working on LED technology for a long time. Just like Seoul Semiconductor, in the long-term imitation process, it also has to face the pressure of the Nichia company's patent disputes. A case in which lawsuits have been played in various markets around the world for four years shows that this road requires strong patience and firm confidence.

Is there a better way for mainland Chinese companies accustomed to taking the short-term downstream market and pursuing short-term benefits? We have set our sights on the body of “Everything Ever Electronics”, a leader in LED lighting in Taiwan.

Taiwan's LED industry began in the early 1970s and has since become an important area of ​​global LED manufacturing. Since 2000, the output value has reached the second in the world, second only to Japan. In 2007, the global LED output value reached 6.7 billion U.S. dollars, of which 25% came from Taiwan.

However, since 2007, LED companies in Taiwan have collectively dived, and share prices have underperformed the broader market. Why? First, the downstream demand has slowed down, while a large number of factories have moved to lower-cost mainland China, and the overall product profit margin has dropped.

As far as the nature of the industry is concerned, the technology patents of Taiwanese companies are heavily concentrated on the mid-downstream chip packaging and lighting applications. Compared with the centralized and extensive coverage of the upstream core patents, such downstream application-level patents are relatively fragmented and are only marginal to the affiliation and industrial core. Therefore, it is not possible to conduct centralization and decentralization, and make an attempt to break into the “core interest circle”. Taiwan’s Everlight Electronics is one of the largest companies in Taiwan.

The company was founded in 1983 and has been focusing on LED chip packaging for decades. In 1996, Everlight successfully developed SMD, a surface mount device packaging technology, and became the leader in this field. It is a major supplier of LG, Sharp, Samsung and other LED LCD TV manufacturers, with a monthly production capacity of approximately 1 billion units. Sales of nearly 300 million US dollars.

After the staged success, Yiguang did not rest on his laurels and did not blindly expand upstream. Instead, he chose to invest strategically in upstream companies and convert the capital obtained in the middle and lower reaches to the control of upstream technological forces.

In the upstream, Everlight is already the main shareholder of LED chip factories such as Jingdian (Taiwan's leading chip factory), Taigu and Guanghan. In 2009, Jingdian invested 720 million yuan, accounting for 19.9% ​​of Taigu, becoming the largest shareholder of Taigu (while Yiguang accounts for 15.9% of Taigu). Everlight is also the largest corporate shareholder of Jingdian.

After such a round of vertical integration, crystal factories in the upper reaches of Taiwan have already entered the sphere of influence of Everlight, making Everlight's future resources intact. This also makes Yiguang become the most complete packaging plant in the epitaxial layout of the upstream LED, and with the international lighting giant Osram reached a patent cross-licensing.

Through the ranking of monthly sales, it can be clearly seen that Everlight Electronics is the leader of LED packaging industry in Taiwan and has significantly ahead of its competitors. The “crystal power” controlled by it is the first in the Taiwan chip production and sales volume.

In the downstream, Everlight also strengthened the layout of the lighting market in mainland China and fully tapped its production capacity and cost advantages.

Based on the original “Guangzhou Hengguang Electronics Co., Ltd.”, Yiguang established a “Shanghai Yaming Solid State Lighting” joint venture with Shanghai Yaming Bulb Factory in 2009. It signed a contract with Xiamen Software Industry Investment and Development Co., Ltd. to jointly build the Xiamen Modern Lighting Application Design and Entrepreneurship Center.

The reason why Yiguang's experience is worth learning is because it is located in the middle reaches of the industrial chain, through selective investment in holding upstream upstream technology-based companies, thereby controlling technology and making an attempt to break into the “core area”.

For the lighting industry, Chinese companies generally have a misunderstanding that lighting is a low-tech and low-threshold industry. If you want to succeed, you must first establish a good channel and build a good brand. As everyone knows, this unhealthy trend just exposed the fatal weaknesses of China's lighting companies for short, flat, and fast.

After the above studies, we discovered that the rapidly emerging young companies, such as Nichia Chemical, Seoul Semiconductor, and Taiwan’s Everlight Electronics, all made great efforts to control the core technologies through various efforts, and applied for patents. Cross-swapping with advanced technology companies to form patent pools and build industry barriers to achieve centralized rights. At the same time, through the separation of powers to obtain a broader market and technological advantages. Find a balance between centralization and decentralization to maximize the effectiveness of technology.

The patents of some Chinese LED companies are limited to the areas of design and lighting design and their subdivisions. They are not high enough and do not have centralized power.

Where do Chinese companies start and master core technologies?

Like Nichia Chemical, cutting directly into the upstream cutting-edge technology, the demand for funds and talent is too high, and does not match the facts. Learn from Seoul Semiconductor, imitate and improve existing technologies, bypass patents, and seek new breakthroughs.

If it is difficult to imitate even more, we can refer to the practice of Yiguang and start with relatively mature packaging technology in the middle stream and invest in excellent upstream manufacturers.

Chinese companies need to use technology with bargaining power to break into the circles where big factories are the core. Then use technology as a weapon to form an alliance. Through decentralization, we can use the advantages of production capacity to expand the market and allow more applications of technology.

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