Diode LED Catalog 2018 | Page 4

ELEMENTAL LED INVESTS IN MORE US MANUFACTURING & ASSEMBLY SSL MANUFACTURING IS TRAVELING BACK TO THE US Excerpts from Page 56 September 19, 2017 LEDs Magazine By Matt John, Elemental LED Is lighting manufacturing moving away from its traditional base in China? This question has been a hot topic for as long I can remember. China is not ready to relinquish the manufacturing throne just yet. The nation has massive production numbers, unparalleled infrastructure, endless backing by the Chinese government, and a still-evolving economy to support its position. However, there is a subset of the industry that is moving away from manufacturing in China to the US at a rapid pace: the modular lighting vertical. The US-based manufacturing movement in modular lighting hinges on three major factors: stresses on Chinese manufacturers, market needs, and quality control. The cost of labor in China has increased almost 3× in China since 2000. Compounding the rising cost of raw goods is the up-tick in the enforcement by the International Trade Administration of various aluminum alloys tagged for up to 45% more in duties due to anti- dumping and countervailing considerations. Chinese manufacturers cannot deliver on the need for speed, and lighting companies cannot stock every possible component combination fully assembled. Last-mile manufacturing is well financed and on its way to becoming an industry standard. Patents and trade secrets also come into play here, as US manufacturers delve deeper into technology and gain unique market knowledge. Modular lighting embodies the market’s solution for speed, variation, and quality. For these reasons alone, manufacturing will find a home in America and it will be hard pressed to find its way back to China. September 19, 2017 2 diode led