LG and Samsung face LED Ban

Korea’s Commission for Shared Growth for Large and Small Companies headed by former Prime Minister Chung Un-chan announced Friday that 25 business items, including LED luminaires, will be restricted to small companies only. This was the second announcement made by the committee. The first announcement that restricted conglomerates from expanding in 16 other businesses such as gochujang, or red pepper paste, and makgeolli (traditional rice beer) was made in September.

Yesterday’s list included controversial areas that weren’t decided upon in the first announcement. For the 25 items, the commission’s recommendations for large companies included withdrawing, downsizing, refraining from expanding or entering new areas. In the case of LED’s, this was ‘withdraw’, and will affect the big industrial conglomorates such as Samsung and LG.

While conglomerates, or chaebols, reluctantly accepted the proposal, which is part of the larger shared-growth campaign, medium-sized players expressed frustrations regarding the government’s limitation on such businesses. Under the restrictions, only small companies will be allowed to sell LED luminaires into the Korean Market. The bigger companies will be limited to selling LED retrofit lamps. This will protect the interests of smaller companies whose production facilities cannot compete with the sheer scale of the chaebols.

The ban only applies to domestic sales. There are no restrictions on international sales.