AMS Osram changes Micro-LED strategy

Exit AMS Osram changes Micro-LED strategy

2024-05-03 From Susanne Braun | Translated by AI 2 min Reading Time

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The supplier surprisingly loses its main customer for its micro-LED technology. As a result, less is being invested here and around 500 jobs are being cut.

AMS Osram fundamentally changes its MicroLED strategy after losing the key project customer.(Image: AMS Osram) — AMS Osram fundamentally changes its MicroLED strategy after losing the key project customer.
(Image: AMS Osram)

For the executives of AMS Osram, the withdrawal of a major customer from the Micro-LED project came as a surprise. After all, the company had constructed a factory in Kulim, Malaysia, with numerous resources and invested in research and development in the technology. As part of the announcement of the financial results for the first quarter, the executives of the supplier now announced the revised strategy for this business area.

AMS Osram had a solid first quarter, but savings must still be made in the area of Micro-LEDs. The first consequence of the loss of the major customer is reduced development activities – both in Malaysia and in Germany. The plan is to instead focus on a small core development, which is geared towards applications in the automotive sector. For example, high-resolution front headlights with LED technology are mentioned. This means that about 500 employees worldwide are affected by the revised strategy.

Withdrawal from the Kulim factory

Some of the employees affected by the restructuring are to be employed in the LED sector. The company's management did not specify how it intends to handle the remaining staff in the micro-LED sector.

The company now views developments in this technology, which is not yet ready for the market, in a more sober light. The business report states: "The new market picture suggests that the characteristics of advanced, high-performance Micro-LED displays will initially play a role primarily in various smaller applications that will scale more slowly and later than originally expected."

Micro LED: Can be ramped up again in the short term

At least the company is positive that efforts in the Micro-LED area could be resumed relatively quickly if a new main customer were to decide to cooperate with AMS Osram. Since equipment orders could be cancelled following the large customer's cancellation at the end of February 2024, at least investment costs could be reduced.

Nevertheless, AMS Osram wants to exit the sale-and-lease-back contract for the Kulim 8-inch factory. They are looking for a new leaseholder to reduce the costs associated with the Micro-LED project. It is also still planned to sell off the semiconductor activities that are not part of AMS Osram's core business.

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