Led Analysis

LED / tech company : what to look out for

* R&D

* Does the company do the manufacturing or just the design and marketing? (advantage is lower overheads)

* Cyclical industry?

* Porters 5 forces

* Threat of new entrants

* Availability of substitutes

* Bargaining power of suppliers

* Competition

* Bargaining power of buyers

* Like most tech areas at the moment, LED in a growth phase. Market demand has been lead by mobile phones? (mobile phone sector panning off now) Other opportunities include cars, computers, TVs, road lights, buildings….

* Taiwan and Japan largest manufacturers

* Patents usually controlled by leading Japanese and American firms

* Patents for white LEDs can be roughly divided into three categories:

* LED chips

* Fluorescent powder

* Packaging methods

* Focus on energy efficiency: US government for example keen to promote LEDs in general use light bulbs. By 2015 should only cost about $10

* There are a plethora of conglomerates as well as pure plays in the market

* Derives most of revenue through LED related sales inc government agencies supporting the development of LED lighting

* Manufacturing in North Caroline and China

* Investment in R&D?

* Sales to their 2 key customers represented 29% of gross revenue

* Inventory back log almost doubled in 2010 compared to 2009

* Inventory management key challenge

* 3 main factors contributing to success

* Intellectual property

* Price

* Performance

* Risk factors

* Increasing reliance on subcontractors

* Matching customer demand and capacity

* High fixed costs

* Product diversification

* Dependent on customers’ ability to integrate the LED products into their own

* Reliant on a few key suppliers

* Change in accounting regulations

* Loss of human capital

* Outlook and aims

* LED...