ANSAN, South Korea — (BUSINESS WIRE) — February 12, 2020 — Seoul Semiconductor Co., Ltd. (KOSDAQ 046890), a leading global innovator of LED products and technology, today announced 2019 fiscal year consolidated revenue of KRW 1129.5 billion and operating profit of KRW 49.6 billion. The consolidated fourth quarter revenue was KRW 280.9 billion while the operating profit amounted to KRW 13.9 billion.
Continuing global economic slowdown due to trade and political conflicts including trade war between the US and China led to the increase of inventory and decrease of customer demand leading to price falls in the LED industry. As a result, Seoul’s earnings decreased by 5% year-over-year (YoY). However, in order to respond to uncertain market conditions, Seoul has proactively focused on driving operational efficiencies by continuing to develop new products and technology to increase sales of high value-added products, producing 5% margin.
Manufacturing in Korea can be as much as three to five times more costly than manufacturing in other emerging countries due to higher labor cost and operational costs. It is worthy to note that Seoul is still making profits even with near 10% of additional spending in R&Ds each year on top of maintaining production site in Korea. If Seoul were to reduce its R&D spending to half similar to its competitors, Seoul can record double digit margins. As such, Seoul plans to reasonably reduce the ratio of R&D spending starting the end of last year.
The sales of general lighting declined year-on-year due to continued weakness in pricing induced by the industry’s high inventory. However, the sales of automotive LEDs continued to grow helping offset overall sales decline for the company and the sales of WICOP products, a differentiated patented technology of package-less LEDs, achieved more than double-digit growth YoY by responding to the demand for larger and slimmer display screen in the TV and monitor market.
Seoul and Seoul Viosys announced the development of their Micro Clean LED, a single-pixel RGB micro-LED technology that enables the design of 4K-resolution TVs from 42” to 220” displays and signage displays. Introduced at the recent CES 2020, the Micro Clean LEDs are ready for mass production.
Unlike with a conventional RGB LED package of 1000µm size normally for signage displays, Seoul offers a single-pixel package of small size of one-twentieth compared to conventional LED packages by combining three (RGB) LEDs into one pixel unit. It also delivers outstanding performance for 1000X faster response time, and up to 30% reduction in internal/external power consumption, as well as infinite contrast range. In particular, Seoul has already won customer approval for single-pixel micro-LED production for signage displays, and the sales of micro-LEDs will be booked starting the first half of this year. The emergence of micro-LED technology has the potential to be a game-changer in the USD 2.2 billion signage display market (LEDinside, 2019).
Seoul provided sales guidance of KRW 240 to 260 billion for the upcoming first-quarter suggesting -7% to 15% quarter-over-quarter (QoQ) growth due to a slow season for the LED industry. This conservative guidance reflects potentially reduced demand from end customers due to reduced production time on concerns of coronavirus. According to Seoul, “as it was the case during the trade dispute between the US and China, customers have begun to reconsider Seoul Semiconductor as a long-term partner as we can provide stable supplies from our Korea and Vietnam site helping customers manage production risk more affectively.”
About Seoul Semiconductor
Seoul Semiconductor is the world's second-largest global LED manufacturer, a ranking excluding the captive market, and has more than 10,000 patents. Based on a differentiated product portfolio, Seoul Semiconductor offers a wide range of technologies, and mass produces innovative LED products for indoor and outdoor lighting, automotive, IT products, such as mobile phone, computer displays, and other applications, as well as the UV area. The company’s world’s first development and mass production products are becoming the LED industry standard and leading the global market with a package-free LED, Wicop; a high-voltage AC-driven LED, Acrich; an LED with 10X the output of a conventional LED, nPola; a cutting edge ultraviolet clean technology LED, Violeds; an all direction light emitting technology, filament LED; a natural spectrum LED, SunLike; and more. For more information, please visit www.seoulsemicon.com/en.
Seoul Semiconductor Inc.