Philips plans Lumileds LED plant in Singapore

08 Sep 2006

A new Philips Lumileds wafer fabrication facility will enable the company to double its output of high-power LEDs.

Philips Electronics is to invest an estimated $80 million to establish a high-power LED wafer production facility in Singapore for its subsidiary Lumileds Lighting.

Initial production at the new facility is expected to start in the first quarter of 2007. By the end of the year, Philips expects to double its total power LED production capacity.

Lumileds currently manufactures LED wafers and chips at its facility in San Jose, California, and operates a packaging facility in Penang, Malaysia. Steve Landau, Worldwide Marcom Manager for Philips Lumileds, told LEDs Magazine that the new facility will be a wafer fab. "Operations in both Penang and San Jose will remain unchanged," he said.

The new plant will be a high-volume production facility for Lumileds' Luxeon range of LEDs, and will employ about 900 people at full capacity.

Landau says that the site in Singapore consists of two buildings previously owned by Maxtor. "As such, the amount of effort and time required to bring up our processes and systems is relatively small. We expect to begin production at the facility in Q1 2007," he says.

Philips describes the investment as part of its strategy "to strengthen its leadership position" in the fast growing and rapidly-emerging power LED market.

Theo van Deursen, CEO of Philips Lighting, said "This investment will not only double the production capacity of our power LEDs in the next year and strengthen our number one position in this field, it will also significantly increase efficiency, supporting our aim for profitable growth."

Philips says that its Luxeon LEDs are used in what it describes as "city beautification" lighting, as well as LCD displays, camera flash for mobile phones, and automotive and various other applications.

This is the latest indication by Philips that it is taking the solid-state lighting market seriously. Last year, the company gained full control of Lumileds by purchasing Agilent Technologies' share of Lumileds Lighting for $950 million.

In the fiscal year ending July 2005, Lumileds sales jumped 28% to $324 million, and operating profit reached $83 million. Lumileds forecast it would have operating margins of 25% in the coming years.

Philips' global lighting rivals have also been busy. Osram has a well-established vertically integrated business that manufactures LEDs and LED lighting products, while just last week GE bought Emcore's 50% share of GELcore and announced a partnership with LED maker Nichia.