Bitten but not shy: ams Osram again eyes an expensive new factory

May 15, 2024
The Malaysian plant exit is still fresh, but that’s not stopping the company from planning another big facility. This time it will be close to home, and not micro LEDs.

Ams Osram continues to reel over its withdrawal from the billion-dollar Malaysian micro LED factory that was once supposed to power a good chunk of its future, but the big letdown has not soured it on big plant investments.

The company is now hoping to build a nearly €600 million ($651.2 million) plant on home territory, eyeing a 2030 opening for the facility at its headquarters in Premstaetten, Austria.

To help fund the €588 million ($638.8 million) project, ams Osram has applied for a €200 million ($216.8 million) subsidy from the European Union via the E.U.’s European Chips Act, which aims to grow Europe’s share of global semiconductor production through public and private investment.

The Austrian government and the Austrian state of Styria — which includes Premstaetten — joined ams Osram in announcing the application and the plans for the new plant. Neither entity stated what their own investment might be. Austrian federal minister of labor and economy Martin Kocher noted that the country has allocated €3 billion ($3.26 billion) in general to boost the Austrian semiconductor industry up to 2031.

The plant would sit alongside existing ams Osram production in Premstaetten. The company said it will initially use the factory to make optoelectronic sensors for medical and automotive applications. It did not specify whether the light source in the sensors would be LED or another technology.

The automotive sector has been strong for ams Osram in recent quarters but difficulties in other areas have been driving down corporate sales and earnings.

The company has been especially challenged in its costly venture in micro LEDs, which it is now eviscerating with actions including a €700 million write-down to withdraw from its costly Kulim, Malaysia micro LED plant that had been scheduled to swing into full production over the next year or two. Ams Osram will continue with limited micro LED production in Regensburg, which will produce micro LEDs for internal use but not for the open market.

The application for E.U. funding marks the second time in less than a year that ams Osram has gone for substantial public funding. In Germany, the federal government and the state of Bavaria combined to provide €300 million for Regensburg plant expansions.

Ams Osram said the new site should generate 250 jobs over the next few years. It is setting aside about 20% of the facility for contract manufacturers.

Meanwhile, ams Osram last week said that it has sold off its passive optical components group to Xi’an, China–based Focuslight Technologies Inc. for €45 million in cash, as CEO Aldo Kamper — now a little over a year into the job — continues to jettison operations that are either performing poorly or that are no longer considered as core businesses under his still relatively new watch.

The Kamper sell-offs follow a long list of operations that his predecessor Alexander Everke sold to help the company recover from the July 2020 acquisition of Munich-based Osram by the much smaller ams.  Many of Everke’s disposals came out of the former Osram side. Kamper — a former Osram executive from pre-ams days — has been eliminating ams-related activities; the micro LED plant came about after the 2020 acquisition.

MARK HALPER is a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]).

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About the Author

Mark Halper | Contributing Editor, LEDs Magazine, and Business/Energy/Technology Journalist

Mark Halper is a freelance business, technology, and science journalist who covers everything from media moguls to subatomic particles. Halper has written from locations around the world for TIME Magazine, Fortune, Forbes, the New York Times, the Financial Times, the Guardian, CBS, Wired, and many others. A US citizen living in Britain, he cut his journalism teeth cutting and pasting copy for an English-language daily newspaper in Mexico City. Halper has a BA in history from Cornell University.