LEDs Magazine News & Insights 3 Nov 2021 – Editor’s Column

Nov. 3, 2021

Welcome to the LEDs Magazine News & Insights newsletter for Nov. 3, 2021. Who knew that supply chain could become such an unpleasant phrase? Personally, I’ve had supply chain issues inhibit a furniture search, reconsider an appliance purchase plan, and make me think twice about automobile options. Most recently, I’ve learned that my options for buying a new PC are severely constrained despite all of the Black Friday advertising.

But how could the supply chain fail for a fundamental commercial business such as lighting? You mix in a global pandemic and anything can happen. Moreover, the supply chain is certainly a global problem. Our UK-based contributor Mark Halper has written a trio of articles about financial results at major European companies. And you guessed it — the same culprit takes center stage in each case.

Let’s start with the globe’s largest lighting company in Signify. CEO Eric Rondolat summed up the situation succinctly, saying he has “never seen anything like it.” The company reported a near 5% drop in sales in the same quarter from the prior year, during a period of recovery when sales should arguably be increasing. Moreover, the supply chain has been especially tough on the technologies that underlie connected lighting and that networked world is an area where Signify has finally found some success. The company said orders are up, but realistically those orders would have already been converted to invoices in better times.

You would think a more regional company might have escaped some of the supply chain issues. Mark also reported on Fagerhult results, and that Sweden-based company is more focused on the European market. Fagerhult CEO Bodil Sonesson said the state of the business was “almost back to normal” over the course of the summer. The company did report a slight quarterly sales increase yet still revealed a backlog of orders.

And third, Mark reported on ams Osram, which combines a global characteristic with an ongoing adjustment in business focus driven by the ams acquisition. Moreover, the acquisition and divestitures of parts of the organization make comparisons quite difficult. The company reported sales up 6% but flat profits for the quarter. The company has presumably benefitted from more stable markets such as autos over smartphones provided by the Osram side of the business. I personally see no way that the auto market can be described as stable. Still, the company said supply chain issues are impacting both incoming chip and component issues to its key automotive customers and overall supply chain issues in shipping its various products. Mark has promised a broader update on ams Osram strategy in the coming days as that combined company still seeks to find its footing. Stay tuned.

I have said on more than one occasion that I thought industry in general could overcome the supply chain issues more quickly than many executives have reported. I’m wavering a bit on that stance. Even our own CEO Chris Ferrell of Endeavor Business Media said in a recent company town hall meeting that he simply didn’t have a prediction as to when supply chain issues would abate. We feel the pinch in multiple ways. Our customer base is greatly impacted and therefore reluctant to spend money. And we still print a lot of magazines. Our printers can’t get paper easily right now.

At least we have some technology reporting that can escape the inclusion of that evil phrase and focus instead on solid-state lighting. I had mentioned some new packaged LEDs in our Monday newsletter. One of those products is the improved HL2X portfolio from Lumileds that has seen about a 10% gain in performance. Also, it was nice to see some success in additive manufacturing news. Signify sad it used 3-D printing on a project involving 9000 luminaires, and ironically avoided supply chain issues.

I’ll close with yet another webcast pitch. Germicidal ultraviolet (UV) technology remains a hot topic for our sectors. Intertek’s Carl Bloomfield and Jeff Davis are going to team up with Jeff Hulett of Vektrex to present on accurately making UV-C measurements. Join us Nov. 18 at Noon Eastern Time.

You will find many more stories of interest in the body of today’s newsletter. And always feel free to contact me to discuss content we post or to pitch a contributed article.

- Maury Wright, (858) 208-9442, [email protected]