LED by growing global demand

Globetronics will spend between RM60 million and RM70 million as part of plans to boost the group's presence in the global light-emitting diode (LED) market

GLOBETRONICS Technology Bhd (7022), an integrated circuit (IC) maker, will spend between RM60 million and RM70 million on technology investment, capacity expansion and research and development (R&D) this year.

The investment is part of plans to boost the group's presence in the global light-emitting diode (LED) market, its chief executive officer Heng Huck Lee said.

This is also in line with Malaysia's aim to replace all traditional light bulbs by 2014 to LED, compact fluorescent lamps and fluorescent tubes due to their energy-efficient and environment-friendly nature.

Globetronics sees LED as its main source of growth, as it already supplies to the world's top five multinational light bulb companies.

It ventured into LED in 2000 when it bought over ISO Technology Sdn Bhd.
Today, the LED business contributes about 20 per cent of the group's revenue, or about RM100 million a year, and it is slated to grow by 15 per cent each year.

By 2012, the global LED market is projected to reach a value of US$10 billion (RM33.2 billion) with an average annual growth of between 20 per cent and 25 per cent. Countries such as Australia and Japan are already putting a ban on incandescent light bulb beginning this year.

Heng said the group is also working with a Swedish company to manufacture specialised LED that will be used in a greenhouse.

"There is demand to replace the entire greenhouse lighting with LED. We are doing the R&D for this niche market with the Swedish group," he said during a visit to Globetronics' factory in Penang recently.

Besides its environment-friendly factor, demand for LED, which is a semiconductor light source, is growing due to its longer lifetime and cost effectiveness as compared to traditional lightbulbs.

For example, LED lightbulb's lifetime can exceed 100,000 hours as compared with 1,000 hours for an incandescent light bulb. It uses less energy, is non-toxic and material used in LED can also be recycled.

For the financial year ended 2009, Globetronics posted RM15.9 million in net profit on revenue of RM217.5 million. The company has cash in hand of about RM90 million.

By Zurinna Raja Adam