Presentation is loading. Please wait.

Presentation is loading. Please wait.

Leotek Electronics Corporation The L eader in E lectro- O ptics Tech nology Address: No. 50, Lung-Yuan 7 th Road, Lung-Tan, Tao-Yuan Hsien, Taiwan, R.O.C.

Similar presentations


Presentation on theme: "Leotek Electronics Corporation The L eader in E lectro- O ptics Tech nology Address: No. 50, Lung-Yuan 7 th Road, Lung-Tan, Tao-Yuan Hsien, Taiwan, R.O.C."— Presentation transcript:

1 Leotek Electronics Corporation The L eader in E lectro- O ptics Tech nology Address: No. 50, Lung-Yuan 7 th Road, Lung-Tan, Tao-Yuan Hsien, Taiwan, R.O.C. Tel: , Fax: , Website: //www.leotek.com. TM – Integrating Patents, Venture Capital and Development of Products for Commercialization -- A Reflection on the Journey of Leotek in Taiwan Presented by: Chen H. Wu, Ph.D. ( ) June 7, 2003

2 Table of Contents Introduction The Starting Point Going Through the Process The Future Challenge Conclusions Leotek Electronics Corporation The Leader in Electro-Optics Technology TM I. II. III. IV. V.

3 Henry Ford Theory of a 3-Leg Stool Mr. Henry Ford was once asked: You said that Technology, Marketing and Financing are the three most important ingredients for a company to be successful, can you tell me which one of these three is the most important ? Mr. Henry Ford answered: Technology, Marketing and Financing are just like the three legs of a stool, now can you tell me which one of these three is the most important ? Technology Marketing Financing Quality Assurance Human Resources Production, Sales MIS, etc. COMPANY Leotek Electronics Corporation The Leader in Electro-Optics Technology TM I. Introduction

4 II. The Starting Point II-1. Product Selection II-2. Attractive Market Potential II-3. Competitive Situation Leotek Electronics Corporation The Leader in Electro-Optics Technology TM

5 II-1. Product Selection Product: Light-Emitting Diode (LED) products * Energy-efficient product: a world-wide trend * Environmentally friendly, low maintenance cost and compact size: Technology of the future; Everything that lights up will be made by LEDs Market: LED traffic signal light grew at a rate of 80~100% per year Technology: * My expertise and strength * Team: Available in Taiwan; Taiwan was (and is) the 2nd largest LED country in the world. Financing: Available in Taiwan (Many VCs) Leotek Electronics Corporation The Leader in Electro-Optics Technology TM

6 Total U.S. Market Size = 12,000,000 units; 1.5 B$ II-2. Extremely Attractive and Exciting LED Traffic Signal Market Leotek Electronics Corporation The Leader in Electro-Optics Technology TM

7 Calculation of Return of Investment of LED Traffic Signal Lamps Traffic Signal Type Ave. on- time Incandescent BulbsLED Traffic Signal Lamps Annual Difference (US$) Initial Cost Difference (US$) ROI (year) Annual Electricity (US$) Annual Maintenance (US$) Annual Total (US$) Annual Electricity (US$) Annual Maintenan ce (US$) Annual Total (US$) 12 Red 50% Yellow 5% Green 45% Total 100 % (Ave.) Conclusion: Based on the above calculations, the average return of investment for a set of traffic signal lamps (including one of each red, yellow and green) is 1.23 years. Leotek Electronics Corporation The Leader in Electro-Optics Technology TM

8 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Energy Saving of LED Traffic Signal Light Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Facts and Numbers Unit 1. Number of Traffic Intersections in USA 300,000Each 2. Average Wattage in Each Intersection When Using Conventional Incandescent Bulbs 1,750Watt 3. Average Wattage in Each Intersection When Using LED Lamps 140Watt 4. Average Energy Saving Per Intersection 1,610Watt 5. Energy Saving if All Intersections Are Replaced with LED Lamps 483,000,000Watt Energy Saving of 483 Mega-watts can be Realized if All Traffic Signal Lights in the U.S. Are Replaced with LED Lamps or A Saving of US$423,108,000 Annually (US$0.10/KWH)

9 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Company Name Began LED Traffic Signal Business Estimated Percentage of Market Share No. of Patents in LED Traffic Signal Ranking Dialight1992~40%11 Ecolux1992~30%22 Precision Solar 1993~15%23 Electro-Tech1992~10%24 Atlite/Cooper1994~2%05 ITCPI1995~1%06 Traffic Parts1995~1%07 Leotek1998~1%18 II-3. Competitive Situation in LED Traffic Signal Lights (1999)

10 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM II-3. Competitive Situation in LED Traffic Signal Lights (1999)

11 Dialight Ecolux Precision Solar Electro-Tech Atlite Leotek ITCPI Total U.S. Market Size: 12,000,000 Lamps 1.5 billion US$ Leotek Electronics Corporation The Leader in Electro-Optics Technology TM 1999 Market Size: 170,000 Lamps 20 million US$ Traffic Parts II-3. Competitive Situation in LED Traffic Signal Lights (1999)

12 III. Going Through The Process III-1. The Dilemma III-2. The Answer III-3. The Strategy III-4. The Achievement Leotek Electronics Corporation The Leader in Electro-Optics Technology TM

13 III-1. The Dilemma (Year 1999) Market Share: ~ 95% of market share occupied by 4 major companies; Leotek had only ~1% Technology: These 4 companies combined owned 7 major patents; Leotek had only 1. Financing: 3 of these 4 companies were subsidiaries of large companies with strong financial backing; Leotek had very little financing. In Addition: These companies entered the market much earlier, with well-known names, strong management and technology teams, well established management systems, etc. Leotek Electronics Corporation The Leader in Electro-Optics Technology TM

14 My Question The LED traffic signal light market is being occupied by many established companies, do I have any chance here? Leotek Electronics Corporation The Leader in Electro-Optics Technology TM My Answer No, I dont think I have any chance here. Even if I think I had a chance here, I dont know how to do it because I dont own much of any marketing, technology or financing. So, should I give up ??? YES

15 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Go over, go under, go around, or go through But never give up,,

16 My Question The LED traffic signal light market is being occupied by many established companies, do I have any chance here? Leotek Electronics Corporation The Leader in Electro-Optics Technology TM My Answer No, I dont think I have any chance here. Even if I think I have a chance here, I dont know how to do it because I dont own much of any marketing, technology or financing. So, maybe I should not give up. But, if I dont, is there an Answer ???

17 III-2. The Answer: The Lion and The Gazelle Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Every morning in Africa, a Gazelle wakes up, it knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest Gazelle or it will starve to death. It doesnt matter whether you are a Lion or a Gazelle…….when the sun comes up, youd better be running.

18 III-2. The Answer: The Lion and The Gazelle Leotek Electronics Corporation The Leader in Electro-Optics Technology TM The original statement: It doesnt matter whether you are a Lion or a Gazelle ………. When the sun comes up, youd better be running. My interpretation: It doesnt mean you are always going to win because you are a Lion; and it doesnt mean I am always going to lose because I am a Gazelle. All I need to know is what do I need to do to win

19 III-2. The Answer: SWOT Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Their Weakness: * Even though big and strong, but move too slowly (an old Lion) * High product manufacturing costs * High operating costs: marketing and Overhead * Slow in new product development * Products too diversified Leoteks Strength: * Flexible and move fast (a young Gazelle) * Strong technology base * Lower costs in manufacturing, marketing and Overhead

20 III-3. The Strategy Leotek Electronics Corporation The Leader in Electro-Optics Technology TM 1.Develop Better Products: * Analyze and understand product technology * Determine competitors product weakness and improve upon it * Develop products with much better quality and lower installation costs * File patents to protect the technology

21 Optical Design - Better optical designs allow Leotek to use fewer LEDs to meet the ITE specifications at lower cost - Filed 2 patents Driving Circuit Design - Better temperature compensation circuit design allows Leotek to have lower cost of the driving circuit - Filed 1 patent Installation Design - Easier and faster installation designs allow 5- minute installation compared to 20-minute installation of competitors products - Filed 4 patents Key Technology in LED Traffic Signal Light Leotek Electronics Corporation The Leader in Electro-Optics Technology TM

22 Example: Installation of LED Traffic Signal Light Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Incandescent Light Bulb Housing Reflector Front Lens Terminal Strip Door To Controller

23 Example: Installation of LED Traffic Signal Light Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Incandescent Light Bulb Housing Reflector Front Lens Terminal Strip Door To Controller LED Module Average Installation Time = 20 minutes Competitors Module

24 Example: Installation of LED Traffic Signal Light Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leoteks Module Average Installation Time = 5 minutes LED Module Key Feature: Leave reflector, socket and wiring in place

25 Example: Installation of LED Traffic Signal Light Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leoteks Module Average Installation Time = 5 minutes LED Module Major Advantages of Leoteks Module 5 minutes installation time vs. 20 minutes Lower installation costs Less traffic interruptions No need to dispose reflectors and light bulbs Can re-install light bulb if needed

26 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Use Better Technology to Develop Better Products Mission Accomplished: Develop Better Products

27 III-3. The Strategy Leotek Electronics Corporation The Leader in Electro-Optics Technology TM 1.Develop Better Products: * Analyze and understand product technology * Determine competitors product weakness and improve upon it * Develop products with much better quality and lower installation costs * File patents to protect the technology 2.Recruit Marketing V.P. from Competitor: * Convince him Leotek has the best products among all leading manufacturers * Convince him Leotek is capable of becoming the number one company in the industry * Provide incentives to join a fast growing company Done

28 III-3. The Strategy Leotek Electronics Corporation The Leader in Electro-Optics Technology TM 3.Manufacturing Lowest Cost Products: * Utilize superior technology, lower labor and overhead costs in Taiwan to manufacture lowest cost products 4.Capital Infusion * Capital infusion of 4.35-M$ to finance rapid growth 5.Aggressively Grabbing Market Share: * Energy crisis in California in 2001 provided great market opportunity for Leotek * Occupied 50% market share in California and 20% market share world-wide in 2001 and became the number three manufacturer in the world

29 Capitalization of Leotek Capital Infusion Date Capital Infusion (M-US$) Capitaliza- tion (M-US$) May, Dec, April, Sept, Mar, July, Dec., July, Dec., Oct., July, Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Unit: Million US$

30 III-4. The Achievement: Leoteks 2001 Sales Revenue Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Unit: Million US$ Turn-over Rate: (Revenue/Capitalization) = 1.56 Revenue per Employee: = $327,000

31 Change of U.S. LED Traffic Signal Light Market Share Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Year 2000 Leoteks market share jumped from 3% in 2000 to 20% in 2001 Year 2001

32 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM LED Traffic Signal Market Position in 2001 Dialight Ecolux Precision Solar Electro-Tech Atlite Leotek ITCPI Total U.S. Market Size: 12,000,000 Lamps 1.5 billion US$ Leotek Electronics Corporation The Leader in Electro-Optics Technology TM 2001 Market Size: 900,000 Lamps 90 million US$ Traffic Parts

33 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leotek Electronics Corporation The Leader in Electro-Optics Technology TM From Patents to Miracles

34 Summary Leotek was established in 1993, with no products, no market and very little money (US$36,000 capital). Spent 5 years searching for products to manufacture, to market and sell. Decided to focus on LED traffic signal lights in 1999 with a market share of 1% in U.S.A. In 2001, Leotek became the world 3rd largest LED traffic signal light manufacturer, with a world-wide market share of 20% Leotek Electronics Corporation The Leader in Electro-Optics Technology TM The Key: Use Technology to Create Miracles

35 IV. The Future Challenge IV-1. Whats next ? IV-2. Goal in LED traffic signal light IV-3. LED commercial product market IV-4. When you are in a pack IV-5. Summary Leotek Electronics Corporation The Leader in Electro-Optics Technology TM

36 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leotek Electronics Corporation The Leader in Electro-Optics Technology TM IV-1. Whats Next ? Success is a journey, not a destination,

37 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM IV-2. Goal in LED Traffic Signal Light Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Dialight Ecolux Precision Solar Electro-Tech Atlite ITCPI Total U.S. Market Size: 12,000,000 Lamps 1.5 billion US$ Leotek Electronics Corporation The Leader in Electro-Optics Technology TM 2004~5 Market Size: 2,000,000 Lamps 150 million US$ Traffic Parts Leotek ONE WAY

38 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Potential Energy Saving of LED Products Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Energy saving of 483 mega-watts can be realized if all traffic signal lights in the U.S. are replaced with LED lamps If all commercial signs are replaced with LEDs, a number of nuclear power reactors can then be eliminated

39 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM IV-3. LED Commercial Product Market Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Color Kinetics DuraLED PermLight Leotek Total U.S. Market Size: 1.5 billion US$ (2002) Annual Growth Rate = 20% Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Products: Street Name Sign Channel Letter Illuminated Commercial Signs Border Tube Sloan LED

40 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leoteks Patent Applications (2003)

41 Leoteks 2003 Target Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Unit: Million US$ Turn-over Rate: (Revenue/Capitalization) = 1.56 (2001) = 2.15 (2003) Revenue per Employee: = 327 K$ (2001) = 330 K$ (2003)

42 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leotek Electronics Corporation The Leader in Electro-Optics Technology TM IV-4. When You Are in A Pack Let marketing lead technology Evaluate market potential and competition before jumping into a new product Avoid developing products that are hard to sell or not sellable Quickly develop marketable products that are patentable Competitive-ness is the key

43 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Leotek Electronics Corporation The Leader in Electro-Optics Technology TM IV-5. New Products The following are products that have been developed and introduced to the market place by Leotek

44 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM LED Street Name Signs 18 48~96 Market Potential = 0.8~1.0 B$

45 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM LED Street Name Signs 18 Leotek is the world leader in this technology

46 Channel Letter Module (CLM) Leotek Electronics Corporation The Leader in Electro-Optics Technology TM

47 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM LED Border Tubes (BTL)

48 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Illuminated Commercial Signs Fixed Signs (Neon Replacement Signs)

49 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Illuminated Commercial Signs Airport Way-finding signs 24

50 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Illuminated Commercial Signs Various Menu Boards

51 V-5. Summary Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Technology Marketing Financing Quality Assurance Human Resources Production, Sales MIS, etc. COMPANY When you are behind the pack - Use technology to create miracles When you are in a pack - Use Marketing to lead technology When you are ahead of the pack - Make sure you have strong marketing, technology & financing

52 A Brilliant Performance Begins with Confidence Saying of The Day Leotek Electronics Corporation The Leader in Electro-Optics Technology TM

53 In a cyclic society, the onus is on business not just to keep up, but to stay a step ahead - Maddy Dychtwald, Cycles: How We Will Live, Work, and Buy Leotek Electronics Corporation The Leader in Electro-Optics Technology TM The key to success is not to look for the perfect answers, you have to keep moving - Carly Fiorina, HP

54 V. Conclusions (1/4) Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Go over, go under, go around, or go through But never give up,,

55 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Every morning in Africa, a Gazelle wakes up, it knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest Gazelle or it will starve to death. It doesnt matter whether you are a Lion or a Gazelle…….when the sun comes up, youd better be running. V. Conclusions (2/4)

56 V. Conclusions (3/4) Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Success is a journey, not a destination,

57 V. Conclusions (4/4) Leotek Electronics Corporation The Leader in Electro-Optics Technology TM A hundred years from now it will not matter what my bank account was, the sort of house I lived in, or the kind of car I drove……. but the world maybe different because I made contributions to the world that I once lived.

58 Leotek Electronics Corporation The Leader in Electro-Optics Technology TM Thank you for your time and attention !!!


Download ppt "Leotek Electronics Corporation The L eader in E lectro- O ptics Tech nology Address: No. 50, Lung-Yuan 7 th Road, Lung-Tan, Tao-Yuan Hsien, Taiwan, R.O.C."

Similar presentations


Ads by Google