Counterfeit Light Emitting Diode (LED) Lighting Technology

Counterfeit Light Emitting diode

Counterfeit Light Emitting Diode (LED) Lighting Technology

Discussion Paper – Counterfeit Light Emitting Diode (LED) lighting technology.

  1. What you pay for is not always what you get.
  2. Why it’s critical that you only deal with knowledgeable and competent suppliers.

Ecoglow distributes products from premium manufacturers like S-Tech, who use premium components, such as LED chips from Nichia in Japan.

First, some background to the main players in the development of LED technology

Hewlett Packard invented the world first LED in 1966.  The technology was commercialized in an IPO in 1999 as Agilent Technologies, developing LED chips and other technologies. Dutch technology manufacturing giant Philips saw the potential of LED’s for consumer goods and formed a joint venture with HP/Agilent –  Lumileds.  Philips and Lumileds had a well-earned reputation for product quality and reliability in the LED chips they manufactured.

Philips bought out HP, became a 100% owner of Lumileds, and separated it in 2015.  In December 2016 Philips announced the sale of Lumileds to a US investor fund, (after an earlier proposed sale to Asian interests was blocked by the US Govt on security grounds).

Philips is concentrating on its core businesses of medical scanners and healthcare technology. This means they have arguably minimized development spending on the much more competitive LED side of the business. Lumileds makes lighting components used mostly in cars but also LEDs used for backlighting in consumer electronics such as smartphones and televisions.

Core LED manufacturers around the world have known this for some time. Production in China has been using the “Philips” name on chips to market into Australia & the rest of the world.

The veracity of these claims can be uncertain, because in fact relatively few chips produced by Philips/Lumileds have been going into lighting –  their core supply was always mainly for Automotive & consumer products (TV & HiFi) not lighting. It is very difficult to determine the source of LED chips used in finished lighting assemblies.

Now a brief background on the manufacturing process for LED’s

There are two types of LED Chip Manufacturers: 1. Full Production (everything in house) such as Nichia Japan & Lumiled (in the beginning only). 2. Part Production (manufacture of diode raw materials only, packaging/assembly by another company) such as Cree, BridgeLux & Lumiled.  Almost every manufacturer now uses this method, except Nichia in Japan.

Processes in the manufacture of LED chips:

1. Base LED Chips are produced and are then prepared for packaging. Imagine round discs (bigger the better) that look like wafer cones. Each wafer section holds one LED chip.

2. Packaging/Assembly – LED chips need to be assembled, which involves taking a base chip wafer and attaching it to two conducting pins/prongs (legs). This finished assembly is what we know as an LED Diode. Diodes are then packaged onto rolls of a sticky substrate. These rolls are the material form used by the lighting manufacturers (S-Tech for example) to apply to the circuit boards (PCB’S).

This is a very specialized process and initially only HP & Nichia had the capital & expertise to automate this step into mass production. Some smaller companies in Japan & US operated similar but much smaller operations for the few other chip manufacturers.

3. Manufacture of the PCB & lighting products. Going from PCB to a complete light fitting (finished product) can be done all in house like (S-Tech and very few others) or can be farmed out (OEM) to 3rd parties for completion.

This delegated OEM production is now the most common manufacturing process for most LED brands. S-Tech for example (and few others) purchase high quality chips direct from Nichia Japan and then produce the PCB in-house for their own lighting structures and fittings, ensuring all components are designed and manufactured in one place at one time, and thus with the most consistent quality standards.

How brands and quality started to disengage from each other

Now back to the Philips/HP Joint Venture.  Cree was Lumileds biggest competitor in the US market.  Cree commenced outsourcing the packaging of their chips to China to save costs.

For a time this provided Cree a competitive edge over Lumiled, who started to lose US market share to Cree. Lumiled were forced to compete on price and so also began outsourcing the “packaging” process to China. This approach impacted on product quality and performance, affecting the brand negatively, and arguably contributed towards HP’s exit and rebranding of the business to Philips Lumiled.

When companies outsource they may provide a certificate to certify that specific chips are used – often they will certify “Philips Lumiled” has been used (as a de-facto quality standard). As has been well documented in many industries, such branded standards are readily counterfeited, duplicated, or misrepresented.

A common practice is to buy batches of a known brand name, mix these chips with a local supplier batch, and then use the certificate of the brand name to market the mixed product. There appears to have been little consequence from Philips over alleged misrepresentation of their brand. And they have now exited.

Chip manufacturers lose control of their quality and product once the chip has gone to an outsource service manufacturer for packaging/assembly. Outsourcing manufacturers find ways where possible to be the cheapest provider and ensure brand owners seek their services for manufacturing & production.

Nichia for example has never gone down this road and have stated they never will. Maintenance of full manufacturing control over their product & quality is a keystone of their brand, reputation, and most important, their product performance warranty.  They also choose to be selective with who they sell to and who gets to use their name & product. S-Tech is one of these selected customers.

Also, those that are promoting products as using “Philips” chips, are referring to the wafer, not the complete LED package (ready to solder on the PCB).  Some companies package the LED’s in-house, which creates issues if the LED wafer is not soldered correctly or with the correct solder, could be even done by hand not machine which further reduces the quality/life of the chip.

The learnings

  1. When lighting companies claim to be using “Philips” we don’t really know the source of the LED and cannot verify the source of the core materials.
  2. Thus we are taking a risk on future reliability and warranty performance.
  3. With S-Tech and Nichia we deal direct with the sources and can be sure of the quality, reliability, and performance of the products manufactured.