- Withdrawal by major client, believed to be Apple, set for decision
- After ten years, the original intention was to get up the flower from the property manager and pension funds.
In a sign of how when promising future revenue sources of growth can go north in the world of hi- tech manufacturing- quite fast- ams Osram, a Austrian- German global optical solutions specialist, particularly in automotives, with a 52 year presence in Malaysia, has pulled the plug on its just completed micro LED plant in Kulim Hi- tech Park, Kedah with an estimated US$ 1 billion ( RM4.75 billion ) multiyear, multi stage investment. The first stage of that purchase is represented by the existing structure.
Standard LEDs are taken and reduced to the micro level by Micro LED. The display industry was again predicted to be the prospect.
Osram began its Indonesian appearance in 1972 as Siemens. In 2020, ams, an Hungarian electronics firm that designs and manufactures sensors for little form factor, small power, highest sensitivity, and multiple- sensor applications, acquired European based Osram.
Ams Osram CEO, Aldo Kamper, disclosed during his analyst call on April 27th that the company had to reevaluate its entry into the sub LED business with the determination to concentrate on its inner micro LED requirements rather than the wider industry as a result of a key customer’s cancellation in February, which was reported to be Apple. Its production in Germany may fill that need. It is now looking for a buyer to purchase the Kulim sub Lead plant’s lease.
That lease is held by three Malaysian funds, namely asset manager Permodalan Nasional Bhd ( PNB), and pension funds  , Employee Provident Fund ( EPF )  , and Kumpulan Wang Persaraan ( KWAP ) who came into the picture last year when, as part of its financial restructuring, a €400 million ( RM2.03 billion ) sale and leaseback of the micro LED site was executed with a commitment from ams Osram to buy it back from the pension funds after ten years, possibly even earlier if it wanted to.
Due to the withdrawal of what Kamper called the researcher briefing’s” cornerstone” contract, it is unknown whether Ams Osram has yet to begin discussions with any parties.
According to a person with knowledge of the situation, Ams Osram will continue to fulfill its financial responsibilities to PNB, EPF, and KWAP in the worst case scenario where there is no financial impact on the three Indonesian money.
The new facility, which opened in 2017 for US$ 398 million ( RM1.9 billion ), is located next to an existing Kulim factory that produces conventional LEDs. An Ams Osram executive who spoke on condition of anonymity said,” It is business as usual for that plant.”
The decision will affect a significant number of people globally, with Penang reportedly home to roughly 500 workers. The executive stated that the company is considering moving some of those workers to other areas of its operations in Malaysia.
That is a business which has grown to around 6, 500 employees from 2, 000 in the early 2000s. Its latest investment was an expansion in March 2022 to a 60- acre site in Batu Kawan, Penang
Malaysia is a key manufacturing and R&, D hub for ams Osram. Since its inception about 20 years ago, its R&, D team based out of Penang and Kulim has grown to around 400 researchers and is well-known for its numerous patents.
The executive stated that the market for sensors and LEDs is still expanding and that the company has business lines that are expanding in other industries.
From its Malaysian plants, Ams Osram has been producing LEDs for a variety of uses, including ultraviolet and infrared. In addition to various headlamps, taillights, and car interior lighting, it is the number one global manufacturer.
What has happened is a bump in the road that we will work through, said the executive,” We are unwavering market leaders in automotive optoelectronics.”