325

°C

SemiLEDs’ product Enhanced Vertical LED series offer higher thermal endurance for process temperatures up to 325° C

9

Products

SemiLEDs manufacture and sell 9 LED chip products

264

Patents

As of August 2019, SemiLEDs issued 264 patents


The Path to Drawdown: LEDs

Light-emitting diodes (LEDs) were invented in 1994 as high-brightness, high-efficiency light bulbs. They work like solar panels in reverse, by converting electrons to photons instead of the other way around. For the same amount of light, LEDs use 90% less energy than incandescent bulbs, and half as much as compact fluorescents. While other lighting technologies convert energy into heat (and wasting most of it), LEDs turn 80% of their energy use into light.

LED lighting has many environmental advantages. Its efficiency in converting energy into light, rather than heat, helps reduce electricity consumption and air-conditioning usage. For people without access to ample energy, LEDs can be powered with small solar panels and can replace expensive kerosene lamps and their noxious fumes and emissions. Where LEDs are used in streetlights, they can save up to 70% of energy and significantly reduce maintenance costs.

Project Drawdown projects that if LEDs become widely used in the residential and commercial lighting market, they can avoid between 10.2 - 10.8 gigatons of CO2 emissions in residences, and between 5.9 - 6.7 gigatons in commercial buildings. To achieve this, the global market share of LEDs needs to scale rapidly:

  • In 2018, LED lighting comprised 3% of the total commercial lighting market and 2% of the residential lighting market;
  • By 2050, LEDs should account for 95% and 90% of the residential and commercial markets, respectively;
  • That’s 12.82% CAGR for residential LED, and 11.21% CAGR for commercial LED lighting between 2018 - 2050.

About

SemiLEDs Corporation (stock ticker: LEDS) is a Taiwanese manufacturer of LED chips on metal alloy substrate. SemiLEDs offers a wide range of high-power LED chips and packages.

LEDS's Role in Drawdown

SemiLEDs develops, manufactures and sells LED chips and LED components, LED modules and systems. Their products are used for general lighting and specialty industrial applications, including ultraviolet, or UV, curing of polymers, LED light therapy in medical and cosmetic applications, counterfeit detection, germicidal devices, LED lighting for horticultural applications, architectural lighting and entertainment lighting.

They package their LED chips into LED components, which they sell to distributors and a customer base that is heavily concentrated in a few select markets, including Taiwan, US, the Netherlands, Germany and India. They also sell their Enhanced Vertical (EV) LED product series in blue, white, green and UV in selected markets. They sell their LED chips to packagers or to distributors, who in turn sell to packagers. (2020 annual report, p. 1)

Unfortunately, SemiLEDs’ sales revenue has been declining over the past few years. Their total net sales revenue fell from $9,214 in 2017 to $6,068 in 2020, a 34.1% decline. They attribute (p. 34) this drop to the decline in the prices of LED chips, slowdown in demand for LED luminaries and retrofits, and decrease in service revenues.

LEDS: What We Like

We’ll update this section as SemiLEDs makes more information about their sustainability efforts.

LEDS: What We Want to See Improve

Achieve Profitability


Since 2011, SemiLEDs has suffered losses (p. 3) because of under-utilization of their manufacturing capacity for their LED chips. In response, they’ve moved and consolidated their LED packaging facility and managed costs and expenses. We eagerly wait for SemiLEDs to bounce back from these predicaments and achieve profitability as soon as possible.

Publish ESG Reports


As of now, SemiLEDs has no information on their sustainability commitments or direct or indirect GHG emissions. To help climate-concerned investors assess SemiLEDs’ carbon footprint, we want to see them publish an annual ESG report with metrics including scope 1, 2 and 3 emissions and GHG emissions avoided.

Enhance Supply Chain Transparency


SemiLEDs purchases raw materials and components from a wide range of suppliers (p. 3) around the world, and has two or more suppliers for a majority of those raw materials. For the purposes of evaluating the carbon footprint of their suppliers, we would like to see SemiLEDs enhance the transparency about their suppliers and their GHG emissions.

Other LEDs Stocks in the Climate Index

Attend Our Next Webinar

Attend Our Next Webinar

Join our next Sustainable Investing 101 webinar, get our favorite DIY options, and walk through how we build our portfolios.

Register
Get Our Newsletter

Get Our Newsletter

Go a level deeper with us and investigate the potential impacts of climate change on investments like your retirement account.

Join Newsletter
Talk To A Human

Talk To A Human

Joining a new investment service can be intimidating. We’re here for you. Click below to email us a question or book a quick call.

Ask a Question