Samsung Electronics' profit and revenue in the third quarter of 2024 did not meet market expectations, for which the group launched a business structure adjustment, and its semiconductor department decided to fully exit the LED business. It is understood that Samsung Electronics LED business mainly covers: lighting equipment LED, TV LED and automotive LED three major areas.

Samsung decided to exit the LED business

CCTV financial report Samsung exit LED business

Four years after LG Electronics withdrew from the LED business, according to CCTV financial reports, Samsung Electronics also chose to withdraw from the LED business.

Data show that Samsung Electronics in 2012 through the merger of Samsung LED company involved in the field of LED lighting. Although Samsung LED average annual sales of about 2 trillion won (about 10.4 billion yuan), but compared to Samsung Electronics annual revenue of more than 200 trillion won (more than 1 trillion yuan), LED revenue accounted for a negligible proportion.

In addition, with the continued poor performance of Samsung's LED business in recent years, its competitiveness in the international market is also weakening. Samsung Electronics believes that it is difficult for the company to obtain expected profits from the LED business, so it decided to divest the business and focus on core areas with more growth potential, such as power semiconductors and Micro LED.

According to the schedule planned by Samsung Electronics, the group first plans to close the LED lighting business in the first half of 2026, followed by the second half of 2026 to stop the TV LED business, and finally completely exit the automotive LED lighting business by the end of 2030. In this regard, Samsung Electronics explained that due to the intensified competition of low-price LED products in recent years, the group is difficult to ensure profitability, so it decided to strategically exit the LED lighting business.

Affected by Chinese LED brand competition

Industry analysts said that Samsung LED business profit is poor, mainly due to price competition from Chinese brands and international brands. In fact, in the past decade or so, China's LED lighting industry has developed particularly rapidly. According to the data of the China Business Industry Research Institute, since 2013, China's LED lighting market has entered a period of rapid development, and the penetration rate of LED lighting products is also rising; In 2017, China's LED lighting penetration rate reached 65.4%, the penetration rate exceeded 70% in 2019, the penetration rate increased to 77.2% in 2023, and the penetration rate is expected to reach 79.5% in 2024.

The agency also pointed out that according to the output value of the downstream application, the size of China's LED lighting market in 2023 is about 701.2 billion yuan, with a compound annual growth rate of 2.36%, and it is expected that the size of China's LED lighting market will reach 716.9 billion yuan in 2024. Today, China has become the world's largest producer and exporter of LED lighting products.

Therefore, under the above background, Samsung Electronics withdrawal from the LED business is based on a comprehensive consideration of the current market conditions and future development trends, aimed at optimizing resource allocation and enhancing the group's overall competitiveness and market performance.

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