Chinese LED companies are accelerating overseas acquisitions, as the lighting industry continues to undergo restructuring.

Why are major international lighting companies纷纷 "leaving the market"?

Why are major international lighting companies纷纷 "leaving the market"?

In the early stages of LED lighting technology development, international giants holding key patents reaped substantial profits due to high technological barriers and significant R&D investments. However, as the technology matured and manufacturing entry barriers gradually lowered, more players—including especially Chinese manufacturers—began entering the market. Leveraging their advantages in production capacity, cost efficiency, and supply-chain strength, these companies have steadily expanded their market share, intensifying competition within the industry.

As a result, the issue of product homogenization in the general lighting sector has become increasingly severe, with performance differences among products steadily narrowing. Consequently, market competition is now shifting primarily to the price arena. For international manufacturers—especially those with high operating costs and a strong focus on brand value—the profit margins in the general lighting business are gradually shrinking. This has prompted them to either restructure their operations or divest from this segment altogether, redirecting their resources toward more profitable areas with greater growth potential.

According to an incomplete tally by LEDinside, international manufacturers such as Royal Philips, OSRAM, Panasonic, General Electric, Cree, and Toshiba have gradually divested their lighting businesses.

In 2016, Philips spun off its lighting business to create Signify, an independent publicly listed company. Since then, Philips has focused on the high-margin healthcare technology sector, while the standalone Signify has gained greater flexibility to compete in the market and pursue strategic acquisitions. As shown in the chart, Signify has successively acquired AMS Osram and Toshiba’s lighting-related businesses.

However, in recent years, the global economic environment has remained unstable. During fiscal year 2024 and the first half of fiscal year 2025, Signify’s traditional lighting business continued to decline, leading to a drop in overall sales. Nevertheless, thanks to effective cost control, debt reduction, and optimization of its business structure, the company managed to maintain growth in net profit. Additionally, its professional and consumer businesses have gradually rebounded, providing crucial support to its overall performance.

Similar to Philips, the German company Siemens spun off its lighting business, Osram, as a standalone entity in 2013. Facing intense competition in the traditional lighting market, Osram separated its general lighting division in 2016 to form "Lumileds," which it sold the following year. Since then, Osram has shifted its focus toward high-tech areas such as automotive lighting and optoelectronic semiconductors.

In 2019, ams launched its acquisition of Osram. In March 2021, the two companies officially merged to form "ams OSRAM." During 2021–2022, ams OSRAM successively sold off its businesses related to LED driver power supplies, smart lighting, plant lighting, automotive lighting, and architectural lighting applications, refocusing instead on core technology areas such as light sources, visualization, and sensing.

A similar strategic shift has also taken place at General Electric (GE). GE’s lighting business, which traces its origins back to Thomas Edison’s Edison Electric Light Company—founded over 130 years ago—has faced declining revenue contributions as LED lighting technology has become more widespread and market competition has intensified. As a result, GE has decided to sell off its lighting division.

In 2018 and 2020, GE sold off its professional lighting business, Current, as well as its consumer lighting operations, marking the end of its nearly 130-year-old lighting business. This strategic move allowed GE to refocus on high-margin sectors such as aviation, energy, and healthcare.

Additionally, international manufacturers such as Toshiba Lighting, Cree, and Panasonic are also at various stages of adjusting or divesting their general lighting businesses, focusing instead on leveraging their core strengths. In fact, by shedding traditional lighting operations amid declining profits and intensifying competition, these global players are making strategic shifts aimed at optimizing resource allocation.

Chinese lighting companies kick off overseas "buying spree" mode

International manufacturers are gradually exiting the traditional lighting market—or divesting non-core assets to optimize resource allocation—creating market opportunities for Chinese lighting companies. Meanwhile, these international firms' business adjustments have also opened up acquisition opportunities for Chinese enterprises, prompting several forward-thinking and financially strong Chinese companies to embark on overseas acquisitions.

In the early stages, Chinese companies acquiring overseas businesses typically focused on factors like brand recognition, economies of scale, and strong market channel advantages. For instance, when Mulinsen acquired Ledvance in 2017— a company that held Osram’s global general lighting brand and extensive distribution network— the acquisition not only helped Mulinsen tap into international markets but also significantly boosted its own brand influence.

In recent years, Chinese companies' overseas acquisition targets have shifted—moving away from the highly competitive and margin-poor general lighting market, and instead focusing on specialized and niche lighting segments that feature high technological barriers, strong profit margins, and robust growth potential.

For instance, Sanan Optoelectronics is focusing on the automotive lighting sector. On August 1 this year, the company announced its plan to jointly acquire a 100% stake in Lumileds Holding B.V., a Dutch LED enterprise, alongside overseas investor Inari Amertron Berhad. The transaction, valued at $239 million, will help Sanan expand into premium international markets and strengthen its competitive edge in automotive and specialty lighting applications.

TrendForce reports that Lumileds holds a pivotal position in the optoelectronics industry, with revenues of approximately $600 million in 2024. The company primarily focuses on automotive lighting (including headlights and taillights), smartphone flash modules, and high-end/niche lighting solutions. Lumileds operates production facilities and maintains teams across Europe, China, Malaysia, and Singapore. In terms of automotive LED revenue, Lumileds ranks third globally, trailing only ams OSRAM and Nichia. Meanwhile, its smartphone flash module business has secured a spot within Apple’s supply chain, though it currently sits just behind Nichia in terms of revenue for this segment. As for its high-end/niche lighting LEDs, Lumileds claims the seventh-largest global revenue share, earning strong favor among leading lighting manufacturers in Europe and North America.

According to TrendForce's LED industry demand and supply database, Lumileds ranks among the top seven global LED packaging manufacturers. This acquisition will help Sanan capitalize on Lumileds' decades-long market presence in the industry.

Also focusing on the automotive lighting sector is Juguang Technology, which specializes in high-power semiconductor laser components and optical devices, with its primary focus on automotive applications, semiconductor manufacturing processes, and healthcare solutions.

In January 2024, Juguang Technology acquired SMO, a renowned Swiss high-tech micro- and nano-optics company, for RMB 586 million. SMO already boasts a well-established market presence in the automotive projection lighting sector, with its products in mass production and integrated into vehicles of leading automotive brands. Meanwhile, Juguang Technology’s automotive business is still in its early stages—but through this acquisition, the company aims to accelerate its expansion in the automotive lighting market.

In May 2024, Torchlight Technology also made an acquisition, planning to acquire AMS Osram's passive optical component assets. This move aims to expand the company's expertise in passive optical components, gain access to wafer-level optical (WLO) module packaging technology and manufacturing capabilities, accelerate its entry into the consumer electronics and consumer-grade endoscope markets, and strengthen its market share and competitive edge in automotive projection lighting applications.

Yiri Technology and Haoyang Shares' acquisitions focus respectively on entertainment lighting and stage illumination.

On May 13 of this year, Yiri Technology announced the acquisition of a 100% stake in Claypaky, the renowned Italian entertainment lighting brand. Founded in 1976, Claypaky’s products are widely used in major performances and sports events. Following the acquisition, Yiri Technology plans to leverage its strengths in R&D, manufacturing, and supply chain management to strengthen its competitive edge in the European market and further solidify its position in the high-end professional lighting sector.

On September 2 last year, Haoyang Shares announced its plan to acquire the operating assets of Denmark’s SGM for €3 million and establish a wholly-owned subsidiary. Founded in 1975, SGM specializes in architectural art lighting and stage performance lighting. This acquisition will diversify Haoyang Shares’ product portfolio, expand its brand presence and distribution channels, strengthen its global market strategy and competitive edge, and ultimately enable business synergy and accelerated globalization.

In addition to expanding into new markets, some companies are choosing to acquire advanced technologies and product portfolios through mergers and acquisitions. By leveraging the acquired company’s international market networks and project expertise, these firms can accelerate their own business upgrades and strengthen their global expansion strategies.

Last July, LEOTEK, an affiliate of Lite-On Technology, acquired Dialight’s Transportation Division, a leading LED lighting manufacturer, to gain access to its established product portfolio and extensive international customer network.

Roman Shares acquired PREDAPTIVE (and its wholly-owned subsidiary, Holovis) to gain access to Holovis' expertise and project experience in immersive technologies, virtual reality, augmented reality, and digital entertainment. Additionally, by leveraging Holovis' project delivery capabilities across key markets such as the U.S., the UK, Abu Dhabi, and Japan, Roman Shares aims to enhance its global market service offerings.

By acquiring AMS Osram's Lighting Digital Systems business unit, Innolux has not only expanded its portfolio of LED driver power products but also leveraged the acquired division’s robust global service network to more effectively penetrate overseas markets.

For Chinese companies embarking on the "buy, buy, buy" overseas strategy, the opportunity lies in leveraging acquired firms to swiftly gain access to cutting-edge technologies, established international brands, and globalized sales channels. Yet, this journey is not without its challenges—integrating the cultures, technologies, management practices, and distribution networks of both parties puts a significant test on a company’s financial strength, strategic acumen, and long-term resilience.

LED niche lighting market may become a new focus for overseas acquisitions.

As overseas acquisitions advance, these moves not only impact the companies' own growth but also reshape the global lighting market landscape. Meanwhile, competition among firms is evolving—shifting toward a focus on high-value-added lighting products and technologies, as companies vie for dominance in branding, scale, and distribution channels.

Notably, in addition to the automotive lighting, entertainment lighting, and stage lighting mentioned earlier, several other promising niche markets are steadily emerging—such as human-centric health lighting, smart lighting, circular lighting, and even plant lighting.

TrendForce estimates that the global smart LED lighting market will reach US$11.573 billion in 2025, representing a year-on-year growth of 19.2%. Meanwhile, the LED plant lighting market is projected to hit US$1.366 billion, growing by 3.9% annually. As the potential of these sectors continues to unfold, they are poised to become key areas of focus for companies considering overseas mergers and acquisitions in the future.

Recent actions by manufacturers also reveal that these sectors are becoming the focus of global expansion strategies.

Take Aoyang Shunchang as an example—on August 18 of this year, the company announced its plan to invest in and build an LED CSP project in Malaysia. LED CSP chip-level packaging technology is ideal for applications requiring high light power density, high luminous efficiency, and long lifespan, such as automotive lighting, outdoor lighting, and smart lighting solutions. At this year’s Guangzhou International Lighting Exhibition, Aoyang Shunchang also showcased several human-centric health lighting products and outdoor streetlights based on CSP technology. By establishing an overseas presence for LED CSP production capacity, the company is well-positioned to drive future growth.

Leyard is focusing on smart lighting, having announced on July 22 this year the establishment of Leyard Middle East Co., Ltd. in partnership with Saudi Engineering Holding Group (EHG). The new company will provide regionally tailored green and smart lighting solutions for both indoor and outdoor applications.
 
Meanwhile, in niche segments such as plant lighting and specialty lighting, despite the overall LED lighting market experiencing a slow recovery in the first half of 2025, Jingko Electronics managed to achieve high-end lighting revenue of 340 million yuan—up 0.6% year-on-year—thanks to its strategic positioning in these high-potential sub-markets, effectively countering the industry’s downward pressure. Looking ahead, Jingko Electronics will focus on developing products and solutions tailored for outdoor, plant, and specialty lighting applications.

Summary

The market space created by the strategic retreat of international giants has been seamlessly filled by Chinese companies, which, leveraging their technological expertise and financial strength, are now gaining a stronger voice on the global stage. Looking ahead, as consolidation continues and Chinese LED firms enhance their ability to operate internationally, they are poised to secure an even more prominent position in the global high-value-added lighting sector.