ams OSRAM Reassessing Micro-LED Strategy Following Project Cancellation

Company ams OSRAM is reassessing its micro-LED strategy following the unexpected cancellation of a cornerstone project for its micro-LED program, the company said in a press release. Discussions with the related customer are ongoing.

Following the cancellation of the project, the company will revisit the future use of its assets related to its micro-LED strategy, particularly its 8-inch LED facility in Kulim, Malaysia. The company expects to take a hit to its balance sheet in the ballpark of €600 to €900 million (~$650 to $975 million) in the first quarter of 2024.

ams OSRAM's "Re-Establish-the-Base" business restructuring plan named micro-LEDs as a core area of focus. The company is now reassessing assets related to this field. Courtesy of ams OSRAM.

Changes to the capitalization of R&D investments into micro-LED and reduced subsidies from public funding plans will impact the company’s operational profitability for FY2024 by up to €50 million ($54 million). Accordingly, ams OSRAM will consider additional cost improvements on top of its Re-Establish-the-Base program to lessen the impact.

The Re-Establish-the-Base program, which the company announced last summer, sought to refocus the company’s priorities while divesting from “noncore semiconductor businesses.” Among the areas of focus listed in the plan were micro-LEDs.

The company expects its largest growth contribution will come from target automotive semiconductor applications, followed by mobile light sensors, the company said.