How do people manage a company? Do they try expanding the company business to make it big and comprehensive? Or do companies focus all their resources on a few selected businesses? Manufacturers’ business strategies may vary. For TongYiFang Optoelectronic (TongYiFang) both strategies are equally important, it is important to have a narrow focus to clarify the company's market position before expanding into other business markets.
The LED industry restructure intensified in 2015, mergers and acquisitions have sped up, while plenty of companies filing for bankruptcy. For SMEs such as TongYiFang a clear market position is crucial for its survival in the volatile market conditions. “A company’s longevity depends on whether it is moving in the right direction,” said the company’s Deputy General Manager Andy Wei, in an exclusive interview with LEDinside.
Andy Wei, Deputy General Manager, TongYiFang Optoelectronics. (LEDinside)
Market position clearly targeting high power light sources
Wei emphasized the company has insisted its market position in the high power light sources, including single high power COB products, since its founding in 2006. “All our products are 1W and above,” said Wei. High power LEDs often have much higher technology and innovation requirements, “which is where our advantage is over other LED companies,” he added.
TongYiFang has a core technology team consisted mostly of veteran R&D staff with years of experience in the industry. Among the core team members, the company’s General Manager Yang Fang was once a senior engineering manager at Philips for seven years. He has brought on board the international lighting giant’s advanced technology and experiences, following his addition to the team.
Based on the company’s competitive R&D edge, and its sensitivity to market changes, TongYiFang has innovated and released new products. Following more stringent cost demands in the market, flip chip LEDs are trending in the industry. High density light sources have become a major market demand, many international manufacturers including Cree and Taiwanese companies have released related products. TongYiFang is also eyeing this market, and has been investing in R&D and cross-checked products. In June the company released its high density flip chip COB light source.
High density technology is defined as raising the driving electric current on the light emitting area of a smaller LED to achieve higher luminous flux, while making the chip much thinner to achieve better performance (which is measured by the parameters of luminous efficiency, luminous intensity, product lifetime, and dollar per lumen).
“Our high luminous density flip chip COBs have a diameter of 11 mm, and its light emitting surface can achieve a power of 120W and a luminous efficacy of 150 lm/W. The chip’s CRI can reach above Ra 95. It also has narrow beam angle design conditions, in which the LEDs can achieve a luminous intensity that surpasses the luminous intensity found at the center of a metal halide lamp. Additional advantages it has includes very good thermal dissipation design, a long lifetime, and uniform light spot,” he explained. Hence, the luminaires can replace traditional ceramic metal halogen lights, and significant advantages in metal irradiation, and high end clothing retail lighting.
“The company’s order situation has been good,” said Wei. The product has been well received by clients, and in the future the company will expand its flip chip production capacity to raise its market shares.
The company has been concentrating on making COB light sources smaller, and with higher power. Moreover, in the large low power lighting market, TongYiFang also has its own strategies. “Three months ago, we released AC-COB, which is a light engine that can directly operate when connected to AC 110/220V power source. This not only can lower the luminaires manufacturing and worker costs, it also greatly shortened the production cycle,” said Wei. TongYiFang’s AC-COBs are mainly applied in LED wall lamps, and feature mainly 3W, 5W, 7W and 11W lights. We have also entered top international manufacturers supply chain,” he added.
Diversifying market strategy to survive
By only focusing on high power components and COB light sources, and defending its product market positioning TongYiFang has also specialized its product strategy. After finding a clear market positioning, TongYiFang has started to add new products to its portfolio to expand its market.
Expansion strategies to scale up production can be unsuitable for SMEs, instead they need to survive by finding the right niche markets. “Not only do we need to specialize, we need to further specialize in various markets,” said Wei. According to Wei, COB light source products are mainly customized products, so precisely matching client demands is extremely important. “For instance we have released special colored COB products for stage lights or super market fresh food lighting. Based on the different lighting environments we will set different parameters to meet client demands,” he said.
Additionally, LED grow lights and automotive lighting and other specific market sectors have emerged in recent years, where TongYiFang has also deployed its market strategy in recent years. “We have mostly been cooperating with clients on LED grow light projects, and have co-developed products. We have achieved certain sales volume in this area,” said Wei. The company was very optimistic about the future outlook for LED grow lights, and plans to further develop its products in this sector in 2016.
“For us LED grow lights LED packaging is not too difficult, but we need to take into consideration the lighting wavelength demands for different crops,” said Wei, “In this aspect, the collaborating company in LED grow lights will have more precise measurements.”
In the automotive LED lighting sector, TonYiFang has different market strategies. “Currently, most of our products are targeting motorcycle and electric cars, and we have entered the original equipment market. As for the automotive lighting market, we are mostly involved in the aftermarket,” said Wei. The company has developed COB light sources specifically designed for automotive LED head lights, which has been well received in the market, said Wei. The company plans to pass TS16949 in the next three years to further expand its automotive LED lighting business, Yang told LEDinside.
In recent years, Taiwanese and Chinese LED manufacturers have also been delving into UV LED market. TongYiFang is involved in UV LED businesses and market sectors. “We’ve mostly been active in the UV LED curing market,” said Wei. However, UV LED sales still consist a small revenue share, and relatively small market size. “In the future UV-C holds the greatest market potential, its effective in sterilization but technically is the most challenging,” said Wei.
Asked about his future strategy, Wei said TongYiFang will continue its market position as a COB light source and single high power light source manufacturer. Additionally, the company has been developing niche markets to expand its market shares.
