LG and other Korean giants face ban on LED luminaire sales

Korean chaebols – giant industrial conglomerates – such as LG and Samsung, have been told that they cannot sell LED luminaires in Korea, in order to protect the interests of smaller manufacturers.

LED luminaires were included in a list of 25 business items that are now restricted to production by small companies only. The list was announced by Korea’s Commission for Shared Growth for Large and Small Companies.

Ella Shum, Director of HB-LED Research for market-research firm Strategies Unlimited, was visiting LG Electronics’ Lighting group when the announcement was made, and said it caused consternation.

“The big chaebols cannot sell LED luminaries, only retrofit bulbs, in Korea,” Shum told LEDs Magazine. “So all their preparations to sell into the Korea market have gone out of the window.”

However, Shum said that selling to overseas markets is still allowed.

Shum added that LG Electronics is considering the LED module/light-engine business, but one cannot tell if LG Electronics or its subsidiary LG Innotek will pursue this market.

The announcement listed a number of other products, many food-related, which gave rise to a surreal opening line in a story on the Korea Joongang Daily website: “Conglomerates will be restricted from expanding businesses in tofu, salted seaweed and LED lighting.”

The Financial Times described this as a “tofu war” but didn’t give any LED-related details. In general background to the story, the FT said that small Korean companies struggle to compete with the chaebols in many areas. “Chaebol that cannot match the skills of resourceful SMEs simply buy them,” said the article.

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