LED Investments


Update: CREE continues to advance – adding over 3% today to an 52 week high.  Could this be takeover speculation?

As of This week, stock in U.S. LED manufacturer Cree rose 10% in one day.when investment bank UBS boosted its rating on the maker of chips used in LED lighting. UBS pointed out that LED lighting is a fast-growing industry. Cree is constantly innovating and producing state of the art LED Lighting.  Other LED manufacturers include Philips Lumileds (a subsidiary of Philips), Osram, Epitar and Toyota Gosei.

The LED industry is growing and consolidating simultaneously. The LED Industry is entering a fast growth stage in 2010 even with the downturn of the economy.Last year, the lighting market was estimated to be $102 billion annually, going up to $130 billion by next year.  Toshiba announced that it is abandoning incandescent lightbulbs and manufacturing only LEDs. h

Philips has been aggressively acquiring smaller LED companies. In recent years, Philips acquired Genlyte for $2.7 Billion, TIR Systems for $75 million and Color Kinetics for $791 million to get a competitive advantage.  Cree acqured COTCO to take advantage of COTC’s better strategic position in China.

Cree is frequently rumored to be a takeover candidate of Philips or GE, which may account for some of the growth of its stock price from 13 to 76 in the last year or so.

Last month, PowerSecure International, another North Carolina company, paid over $4 million to buy a major stake in a smaller LED lighting company called Innovative Electronic Solutions Lighting, and got the option to buy the rest of the company for $10 million.

PowerSecure saw their revenue grow 700% last year despite the great global recession.

PowerSecure also bought the part of EfficientLights, another LED light manufacturer that it already owned a majority stake in.

LEDs are increasingly seen as the future of electric lighting. Incandescent and fluorescent bulbs will become obsolete because LED lights are vastly superior – long-lasting, up to 90% less energy use, environmentally friendly.

According to industry estimates, LEDs represent a potential $30 billion to $50 billion in annual sales.  Read more.

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LED Lighting Manufacturers are hot investments, both as public stocks like Cree (CREE) and in the private sector.

TerraLUX Inc., a Boulder-based LED light manufacturer, has received $5.6 million in venture capital financing . Luminus Devices, another LED manufacturer, raised $19 million and $47 million on top of that.  LED Lighting Fixtures raises $16.5 Million in a second round of financing bringing the company’s total capital to $23 million.  Solais Lighting raised $2.3 Million.  Bridgelux raised $30 million.

Toshiba, the Japanese corporation that has manufactured incandescent bulbs for 120 years, is discontinuing production to focus on LED lights exclusively.  Panasonic expects LED lighting to account for 30% of its total revenues in 2015.  By 2012, Korea is set to spend over $130million US to develop LED lighting technology.

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