I was walking the halls of Light + Building in Frankfurt this week. I’ve walked these same halls almost every cycle since 2004.
Over the last 22 years, I haven’t just watched the rise and fall of a trade fair. I’ve witnessed the complete surrender of a multi-billion-euro European industrial stronghold.
The Dutch and the Germans invented modern lighting. For a century, names like Philips and Osram dictated the global market. Today, the throne belongs to Chinese conglomerates. MLS, Opple, Sanan, and NVC didn’t just take market share; they took the entire value chain.
I’ve bled on the factory floors of this industry. I helped execute the turnaround of LEDVANCE when it transitioned from a German legacy to an Asian powerhouse. I know exactly how this happened.
Europe didn’t lose because of bad engineering. We lost because of bad unit economics, boardroom arrogance, and a fundamental misunderstanding of how the game was changing.
Here is how Europe handed over the lighting industry—and the brutal lesson we must learn to save our remaining infrastructure sectors.
Phase 1: The Component Surrender (The Trojan Horse)
It started in the early 2000s with a classic spreadsheet error.
European boards looked at their P&L and decided that manufacturing low-margin components—glass tubes, basic drivers, raw fixtures—was beneath them. It was “dirty” work. The prevailing MBA logic of the time said: Outsource the low-value components to China. Keep the high-value brand, the R&D, and the final assembly in Europe.
But in hardware, the factory floor is where innovation actually happens.
By outsourcing the components, Europe funded the capitalization of Chinese manufacturing. We gave them the volume needed to master the production lines. We handed over the blueprints of the Trojan Horse and paid them to build it.
Phase 2: The Manufacturing Bloodbath (The LED Shock)
Then the physics changed.
The industry shifted from traditional incandescent and fluorescent lighting to LED. Lighting was no longer a slow-moving electrical engineering discipline. It became a fast-moving semiconductor and consumer electronics game.
European incumbents tried to play the LED game with a 100-year-old mindset. They worried about perfect color rendering indices (CRI) and engineered products designed to last 20 years. They operated on 3-year product development cycles.
Chinese players recognized the new reality: LED was a consumer electronics volume play. Scale was the only metric that mattered. Backed by state subsidies for MOCVD equipment, companies like Sanan Optoelectronics flooded the market with LED chips.
The hardware “Valley of Death” is brutal. You either achieve massive economies of scale, or your unit economics bleed you dry. China scaled. They drove the cost of a basic LED bulb from €20 down to €2. The European giants simply couldn’t manufacture at those prices. We lost the factory floor completely.
Phase 3: R&D, Sales, and The Final Checkmate
By the mid-2010s, European companies were drowning. They were acting as mere marketing agencies for products entirely manufactured in Asia.
But Chinese firms weren’t satisfied with being anonymous OEMs. They wanted the brand equity. They wanted the distribution networks. They wanted the R&D.
So, they bought them. The acquisition of Osram’s general lighting business (LEDVANCE) by a Chinese consortium led by MLS was the watershed moment. It wasn’t just a financial transaction; it was a transfer of global sales channels and century-old intellectual property.
Today, Chinese companies design the chips, manufacture the fixtures, write the firmware, and own the brands selling directly to European consumers and B2B distributors. The handover is complete.
The Provoking Lesson: Why Europe Failed
We lost because European boardrooms treated a rapidly changing, consumer-oriented electronics game like a legacy infrastructure business.
European R&D is obsessed with over-engineering. We build the perfect product, but it takes three years and costs 40% more than the market is willing to pay. Chinese R&D is obsessed with Design for Manufacturing (DFM) and iteration speed. They launch a “good enough” product in six months, capture cash flow, and iterate until it’s perfect.
In a consumer-oriented game, speed of iteration and brutal unit economics will beat legacy engineering purity every single time.
The Path Forward: Winning the Infrastructure War
Does this mean European hardware is dead? No. But we have to stop fighting wars we’ve already lost.
Let me be clear: China is not the enemy. Chinese manufacturers simply played the game in front of them, and they played it better. We cannot waste time on protectionist complaints or geopolitical blame.
Our focus must be entirely internal. We must figure out how to make European industry relentlessly strong again. We must find our anchor point in a global market that is becoming increasingly unpredictable.
Europe cannot beat Asia in high-volume, low-margin, rapid-iteration consumer electronics. The supply chains are too deeply entrenched.
But Europe can—and must—dominate the Infrastructure sector.
As we move into the era of smart grids, industrial automation, data center power management, and high-Capex B2B infrastructure, the rules change again. In infrastructure, a six-month product cycle is a liability, not an asset.
When you are installing industrial control systems or grid-level energy solutions, buyers care about:
- Decade-long reliability.
- Data security and geopolitical compliance (FDI regulations).
- Deep, specialized engineering physics.
This is where European DNA thrives. But we cannot do it with the same arrogance that killed our lighting industry.
To reestablish our dominance, we must execute a hybrid model. We need to marry European R&D and infrastructural precision with Asian manufacturing agility and supply chain unit economics.
We need to carve out legacy industrial units from bloated European conglomerates, strip away the bureaucracy, and operate them with a ruthless focus on commercial reality. No more vanity engineering. Just hard, operator-led value creation.
The lights went out on European dominance in lighting. Let’s make sure we don’t hand over the grid next.
► Are you a PE fund or corporate director looking at European industrial carve-outs? The landscape is shifting rapidly. DM me the word “INFRASTRUCTURE” and I’ll share our internal market map on how Echo Nova is structuring cross-border industrial transitions in 2026.