General Electric Company (GE), Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (TSM): How Technology Can Save the Night

Philips North American CEO recently told Bloomberg that he expects LED sales to grow 40% in 2013. The products made up 25% of the company’s lighting sales last year, but he believes they will hit 50% of sales by 2015. The lighting division made up about 30% of the company’s top line in 2012, second only to its healthcare division. That means that Philips top line will be notably impacted by the LED shift.

General Electric Company (NYSE:GE), meanwhile, has scored notable LED sales have from far off lands like Indonesia, Hungary, and Malaysia. Closer to home, the Borough of Tarentum in Pennsylvania (population 4,500) is converting 100% of its streetlighting to GE systems, saving up to $40,000 a year.

In 2010, GE’s LED sales accounted for just 10% of the lighting divisions sales. The Lighting Division’s CEO told Bloomberg at that time that he expected LED bulbs to make up 75% of the divisions top line within 10 years. The division is part of the GE’s Home & Business Solutions segment, which contributes some $8 billion to the company’s $147 billion top line. According GE Lighting’s web site, the lighting company is a $3 billion business. Small compared to GE overall, but still a notable business.

A Newer Light Entrant

Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM), one of the worlds largest semiconductor foundries, is also working to enter the lighting market. Since LEDs are essentially chips, this move makes some sense. The company’s longtime focus on making microchips for others could complicate its efforts to take on a new business. Add to this the company’s efforts to enter the solar energy space, and there are clear risks.

Still, Taiwan Semiconductor is a well-run company, and both solar and LEDs are closely related to its core business. That makes this company another to watch in the LED lighting space.

Light Pollution

Pollution is kind of hard to get a handle on when considering the vast size of the United States. While just turning the lights off makes sense in some ways, it is far more complicated than it may seem. Even if this rule doesn’t jump the pond, however, investing in LED companies can make good investing sense.

The article How Technology Can Save the Night originally appeared on Fool.com and is written by Reuben Gregg Brewer.

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