Osram invests in further growth in China

In the presence of high-ranking representatives of the Jiangsu province, OSRAM AG today laid the foundation of its new plant in the Chinese city of Wuxi. In doing so, the company is taking the next step in expanding its activities in China, the world’s largest single lighting market. LED chips will be packaged in housings at the backend facility, scheduled to be completed by the end of 2013. The production of the LED chips (frontend) will continue in the Regensburg (Germany) and Penang (Malaysia) plants. “China is already today the biggest sales market with significant future potential. The new assembly plant enables us to better participate in the strong market growth in China and further extend our solid position in Asia,” said Wolfgang Dehen, CEO of OSRAM AG. “Growing at a remarkable rate, Jiangsu Province’s LED industry is at the forefront in China. We will fully support Osram’s development in Wuxi with the highest quality service, and we also hope Osram can expand its investment in Wuxi to have the plant up and running as soon as possible,” said Xueyong Li, Governor of Jiangsu Province.

The contracts for the new Wuxi location were only signed in May this year. The groundbreaking now marks the beginning of the construction of the 100,000 square meter compound. Osram will invest a low three-digit million euro figure over the next five years whilst also securing comprehensive support from its Chinese partners. In the final completion stage, the new assembly plant will be able to accommodate up to 1,600 employees.

With the new plant in Wuxi, Osram is responding to the increasing demand for LED-based products in the fast-growing Asian market, thereby sustainably reinforcing its regional position in the growth region Asia. This comes against the backdrop that the LED backend capacity at the Osram plant in Penang, where chips are both produced and packaged, is expected to reach its limits within the next few years. In addition to its two frontend production plants, Osram will in future have two backend sites. “With highly skilled personnel, a good infrastructure and experienced partners, Wuxi provides the best conditions for our new LED assembly,” said Aldo Kamper, CEO of the Osram Opto Semiconductors business unit.

The Asian region already accounts for around 35 percent of today’s global general lighting market, which is expected to increase to 45 percent by 2020 according to recent studies. The Chinese lighting market alone, worth over 8 billion Euro today, is predicted to more than double by 2020. In fiscal year 2011, Osram generated about one fifth of its revenue in the Asia-Pacific region, where it employs over 16,000 employees. This workforce is larger than that of any other region worldwide, and roughly half of it is employed in China. Osram has marketed products in the region for about 80 years, covering all major stages in the value chain from development and production to sales.