Some of you might have heard that GE is selling it's appliance division to AB Electrolux of Sweden. It's going to be interesting to see what they will do with their lighting division. A few years ago, GE tried to sell both lighting and appliance as a "package deal" but there were no offers.

Whatever the outcome, I hope they either keep it or sell it to anyone but Philips.

I hope GE's lighting division wont end up in any of the big names in lighting industry. Its sad to know how many of smaller lighting companies have been bought out by big manufacturers. I like when there is lots of operators out there to make decent amount of competition.

Sheesh. I'm not surprised they've pawned off their appliance division, but slightly so at their wish to sell their lighting business. Although I suppose lighting is not a terribly profitable market, nowadays.

It seems to me, GE (as many others) haven't catcehed the extremely high profit margin LED train, while the "classical" technologies become of very low margin market these days...

I totally agree with Medved. Big manufacturers have been pretty cautious about LED technology and have not cached the hype-train where apparently some new names have made good profits. If led-revolution (as some are calling it) is successful thats gonna be huge change for light source manufacturers.

Part of that was the fac, then the decision makers (not the officials in the companies alone, but mainly the shareholdes) of thetraditional lighting manufacturers were not practically familiar with the fundamenmtals of the semiconduictor manufacturing economy and apparently misjudged the cost contributors...

Some of them "catched" thetrain on the very last moments by acquiring the LED semiconductor companies (as Philips swallowed Luxeon some years ago,...) before the LED companies become too big to be swallowed, but some (like GE) waited way too long and now the still independent traditional LED makers (like Cree,...) became alone so strong, so became a key player without the need for any support from any "traditional" lighting brand...

If their lighting division IS indeed bought out my someone else I'd be curious to see what the lamps would be like afterward...sorta like how Philips gradually phased out the Westinghouse machinery and design features then occasionally uses a design feature somewhere...like how apparently current Philips ALTO fluorescent lamps blacken/age like Westy blackenders! Or how their current 4100K lamps use the old Westinghouse "Ultralume" phosphor blend apparently...

So you're saying that my Philips Cool White Supreme is essentially a Westy Ultralume with thin glass and low mercury???

Don't confuse Profits with Sales.  You will see that the companies who are strong in LED almost only ever talk about the latter, but not the former.  In the world of LEDs there are hundreds of times more competitors than with traditional lamps, and it is technologically much easier to manufacture LED products.  This leads to intense commercial competition, which is won by the companies who are prepared to either go to the lowest possible costs (which often means inferior quality that some of the big companies may not be willing to market), or who are willing to take smaller profit margins.

The sad truth is that it is far more difficult to earn a profit out of LEDs than it is with traditional light sources.  The change is particularly painful for the traditional lamp companies who are used to earning very healthy profit margins, to now have to transition to making products which bring a far smaller return.  Many of them are failing in this respect and are not surviving the transition of the industry to solid-state lighting.

GE meanwhile has just killed the rumours that Lighting is up for sale.  That might have been true a few years ago, but it seems now that it's not an option.  GE is financially quite a complex company, and it needs a business like lighting whether or not it is profitable.  Its other business units have very long cycle times between developing a new product and then getting a return on its investment - things like designing a new aircraft engine, power station, medical imager or diesel locomotive are not businesses that you can expect to move fast.  Having a continuous turnover and income from a fast cycle business is needed to sustain the other big divisions during their times of investment, and the businesses like Lighting have traditionally served that role within GE.   Now that consumer appliances and Plastics have been split off from GE, it could be needing its Lighting business more than ever before!

I do really mean the margin. But it means you have the complete manufacturing chain: So start from "sand".
So if you have to buy LED chips from e.g. Cree, then indeed, it is not you, who made that profit, but Cree does.

Yes, assembling the dies together with some electronic can do nearly everyone, so in that part of the manufacturing process there is indeed very strong competition.
The profit lies in the technologically complex part and that is the LED chip manufacture, there the competition is very weak - there are really just three or four players, not much more. And it is that part, what benefits from the semiconductor manufacturing economy.
The rest of the assembly isn't as much different from the "classical" lamp manufacturing process (the machine has to pick one by one in many steps,...), the technology is only easier to master.

Only Osram and Philips are the major lighting players what I'm sure about, who had acquired the LED semiconductor manufacturing, so who are able to benefit from the LED margin... And in my opinion only Philips managed that acquisition in time, Osram was already quite late (when the margins just start to turn down)...
But it is true, without the major lighting players being involved the companoies like Cree could not realize their profits, so they can not keep the margins so ridiculously high forever...

And Philips is rather special company, in many divisions they tend to overengineer whatever they make, so they dump a lot of money there, so the margin could be easily gone...

I am not sure I agree - I think it's even tougher to earn profits in the technologically advanced field of the LED chip manufacture than in the relatively simple products built around them.  It is like the rest of the semiconductor industry, where you are doing very well if you can early just a few % profit margin.  Often in the case of new products its even worse and sales may have to happen at a loss - just to get enough volume into the factory so that they can then work on getting the cost down thanks to the increased volumes and being able to fine-tune and optimise processes.  With many semiconductors that is OK and the profits then materialise, but the speed of progress in LED is killing that business.  Often a new product is made obsolete by something better, and it proves extremely challenging to keep things in production for long enough to recover the investments that were made.  It really is quite a nightmare scenario and many semiconductor manufacturers are struggling or completely failing because of this.

Ultimately this is one of the problems that led to Philips deciding to jettison its LED semiconductor and packaging business, Lumileds, before the announcements to begin pulling out of the rest of the lighting business were made.  They never really managed to make the LED division profitable enough, and for years had to subsidise its losses with the profits being earned on other products.  Now that those products begin to disappear, before the LED division could gain enough volume to make itself profitable as had been hoped, there is nothing left to continue subsidising it.  So it has to go.

It's also one of the reasons why you start to see that the companies who formerly made only the raw semiconductors and packages, are beginning to diversify into making complete retrofit lamps, luminaires, and the control systems.  Cree started making that transition a few years ago.  It cannot have been an easy decision to start competing with all of their customers by making the same kind of products - a financial incentive is surely what would have pushed them into that direction.

As I wrote, chip makers like Cree need to sell the high volume make the profit to happen. SO they have to make sure they are known by end users, so they will by a products "powered by Cree".
And that would be a good reason to start making final products on their own.

And what is needed to say, the profit dropped a lot and it is still going down. It frst hurt the final assemblers, but now it moves to the chip makers as well.

With the very simple semiconductor devices like LED's, the new development iosn't as expensive, the main expenses lie in building and equipping the factory. But then the same machinery could do virtually everything on that wafer size and with given litography precission. And LED's do not require much precission and I doubt they ever will (it is just a simple diode after all).