Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229- 91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu.   EUROPEAN COMMISSION  
Brussels,  06.07.2020  
C(2020)  4682 final  
PUBLIC VERSION 
 
To the notifying party 
Subject : Case M.9716 – AMS/OSRAM  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 29 May 2020, the  European Commission received notification of a concentration 
pursuant to Article 4 of the Merger Regulation resulting from a proposed transaction 
whereby  ams AG (‘AMS’, Austria) intends to acquire  sole control , within the 
meaning of Article 3 (1)(b) of the Merger Regulation, of the whole of  OSRAM Licht 
AG (‘OSRAM’, Germany)3. AMS is referred to hereinafter as the ‘Notifying Party’ 
and together with OSRAM  as the ‘Parties’. The undertaking that would result from 
the proposed transaction is referred to as the ‘merged entity ’. 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “ Merger Regulation” ). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union ( “TFEU ”) has introduced certain changes, such as the replacement of  
“Community ” by “Union ” and “common market ” by “internal market” . The terminology of the TFEU will 
be used throughout this decision.  
2  OJ L 1, 3.1.1994, p . 3 (the “EEA Agreement”).  
3  Publication in the Official Journal of the European Union No C  195, 10.06. 2020,  p. 4. 
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 concerning 
non-disclosure of business secrets and other  
confidential information. The omissions are 
shown thus […] . Where possible the 
information omitted has been replaced by 
ranges of figures or a general description.  
 
 
2 1. THE PARTIES  
(2) AMS  is an Austrian undertaking  active in the supply of sensor solutions worldwide 
and focused on the development and manufacturing of high- performance sensors , 
sensor integrated circuits, related algorithms and software. AMS’ business activities 
are divided into three key areas: (i) optical -, (ii) imaging -, and (iii) audio sensor 
solutions.  
(3) OSRAM  is a German unde rtaking  active in lighting technology in the area of 
automotive and specialty lighting, light management systems and lighting solutions. 
OSRAM’s business activities are divided into three main business units: (i) optical 
semiconductors, (ii) automotive lighting, and (iii) non -automotive lamps, electronic 
components and systems. 
2. THE CONCENTRATION  
(4) On 7 November 2019, ams Offer GmbH, an AMS wholly owned subsidiary , made a 
public off er to acquire  all shares of OSRAM  (the ‘Transaction’) . The initial offer 
period expired on 5 December 2019. The offer was subject to a [over 50] % 
minimum acceptance threshold and customary closing conditions, including merger 
control clearance. Such accept ance threshold was achieved by 5 December 2019, 
after which AMS extended the offer for an additional accep tance period, which 
ended on 24 December 2019.4 Upon completion of the Transaction, AMS will hold 
[over 50%]  of the voting rights of and sole control over OSRAM . Conversely , post-
Transaction, no other shareholders or shareholder -approved board members of 
OSRAM (different from AMS) will have any direct or indirect veto rights that 
concern decisions which are essential for the strategic commercial behavio ur or 
business policy of OSRAM. 
(5) It follows that the Transaction would result in a concentration within the meaning of 
Article 3(1)(b) of the Merger Regulation.  
3. UNION  DIMENSION  
(6) The Transaction does not have a Union dimension within the meaning of Article 1 of 
the Merger Regulation. With regard to Article 1(2), AMS’ turnover does not amount 
to more than EUR 250 million in the Union. With regard to Article 1(3), the Parties’ 
aggregate turnover amounts to more than EUR 100 million in only one Member 
State, i.e.  Germany.  
(7) However, on 29 January 2020, AMS submitted a request for a referral to the 
Commission pursuant to Article 4(5) of the Merger Regulation (‘Form RS’). The 
request fulfilled  the two conditions set out in Article 4(5) of the Merger Regulation 
in that (i) it referred  to a concentration within the meaning of Article 3 of the Merger 
Regulation that  (ii) had  to be notified in at least three Member States.  In addition, the 
Transact ion fulfil led a number of further criteria set out in the Commission’s Notice 
                                                 
4  [Details about the transaction ]. 
 
 
3 on Case Referral.5 In this regard, s ince the case extended  over territories reaching 
beyond national boundaries, as the markets involved were  larger than national  as per 
the Comm ission’s previous decisions ;6 and since the case required investigative 
efforts in several countries as well as appropriate enforcement powers, the 
Commission concluded it  was in the best position to review the Transaction.  
(8) The Form RS was transmitted to a ll EU Member States and none of them expressed 
their disagreement to the request for referral. The Transaction is  therefore deemed to 
have a Union dimension.  
4. INTRODUCTION TO SEMICONDUCTORS AND OPTICAL SEMICONDUCTORS  
(9) The Transaction brings together  AMS ’ and OSRAM ’s development, manufacture  
and supply of semiconductor products, including ancillary software.  The Parties’ 
activities overlap in  the development, manufacture and supply of certain optical 
semiconductors . 
(10) Semiconductors are key components of electronic devices such as diodes, transistors 
and other electronic components. Devices containing semiconductors include  mobile 
phones, computers, domestic appliances, cars, medical equipment, identification 
systems, l arge-scale industry electronics and aerospace equipment. Semiconductors 
are rarely bought directly by end -consumers . Instead, they  are mainly bought by 
original equipment manufacturers (‘OEMs’)  active in different sectors .7 
(11) A semiconductor has an electrical conductivity value that is situated between 
insulators and conductors. Its conductivity changes based on various factors, 
including heat, light, electric current or electromagnetic  fields. The ability to change 
conductivity based on environmental factors  makes  semiconductors suitable to 
control electronic signals (reversing, amplifying) inside of electronic devices.8 
(12) Leading market analysts  split the semiconductor market into four segments, namely 
(i) integrated circuits (‘ICs’) ; (ii) discretes; (iii) o ptical semiconductors; and 
(iv) sensors and actuators.9 
(13) ICs are semiconductor devices composed of diodes, transistors and other electronic 
components, combined with conductive interconnect material, which controls the 
current and voltage of electricity  runni ng through it. Nowadays, ICs are particularly  
complex  and compact . ICs currently used in electronic devices are called  
“microchips” or “chips” and can contain several billion transistors along with diodes 
and other electronic  components. Figure 1 depicts an example of ICs.  
                                                 
5  Commission Notice on Case Referral in respect of concentrations (‘ Commission’s Notice on Case 
Referral ’), OJ C 56, 05.03.2005, p. 2- 23. 
6  See for example: M.8306 – Qualcomm /NXP Semiconductors , M.7585 – NXP Semiconductors /Freescale 
Semiconductor , M.7585 –  NXP Semiconductors /Freescale Semiconductor . 
7  Form CO, paragraph 80.  
8  Form CO, paragraph 81.  
9  See for example: Form CO, Annex 10 “Appendix 025_ID_LL_0030, IHS Markit Annual 2001 to 2018 
market shares ”.  
 
 
4 Figure 1 Example of Integrated Circuits  
 
Source: Form CO, figure 3.  
(14) Discretes  are physically standalone packaged semiconductors specified to perform 
an elementary electronic function, which are not divisible into separate components 
functional in themselves. Discretes  typically include a single semiconductor such as 
a diode or transistor and are practically the opposite of  an IC , which has many 
devices on a single piece of semiconductor (see Figure 2). In practice,  discretes are 
designed for high power and high frequency, which require special use and 
packaging.  
Figure 2 Examples of discretes  
 
Source: Form CO, figure 4.  
(15) Optical semiconductors  can be broadly divided into two major groups : (i) optical 
semiconductors transforming electricity into light (li ght-emitting devices); and 
(ii) optical semiconductors transforming light into electricity (light- receiving 
devices).10 Among  the light -emitting devices are laser diodes and LED. Figure 3 
depicts an example of LED meant to be mounted through a hole (left -hand side) and 
an example of LED meant to be mounted on a surface (right -hand side).  
                                                 
10  Form CO, paragraph 85.  

 
 
5 Figure 3 Examples of LED  
 
Source: Form CO, figure 6.  
(16) Light -receiving devices such as image sensors and light sensors generally output 
electric signals in response to a change of light. Figure 4 depicts a particular light 
sensor produced by AMS where a light source is used for measuring the proximity of 
certain objects by measuring the time employed by the light source to travel to th at 
object and back to the sensor itself. Often and more generally, light sensors are stand 
alone devices, i.e. they do not require an emitter, and they measur e ambient light or 
ambient colour.  
Figure 4 Example of a light sensor produ ced by AMS  
 
Source: Form CO, figure 6.  
(17) Sensors and actuators  are technical components used to help detect signals in a 
real-world environment and transmit those to embedded processing applications.11 
Sensors are specifically designed to measure externaliti es like quantity of heat, 
temperature, humidity, pressure, sound field parameters, acceleration, pH value, 
ionic strength, electrochemical potential and/or the material composition of its 
surroundings. A sensor always works together with other electronic devices, which 
translate and then process the information measured by the sensor. Actuators use 
electronic signals to influence the real world by performing a certain action.  
                                                 
11  Leading market analysts consider  light and image sensors within optical semiconductors  and not within 
sensors and actu ators, given that they  constitute a key part of an optical solution.  

 
 
6 Figure 5 Examples of sensors and actuators  
 
Source: Form  CO, figure 7.  
(18) Manufacturing semiconductors, and more specifically optical semiconductors , 
entails complex manufacturing steps and processes. Once semiconductor s are 
manufactured , they generally require assembly and packaging before they can be 
integrated by a customer  such as a smartphone manufacturer or automotive OEM. 
For example, various semiconductor devices  are assembled into a single camera 
module, which can then be further integrated into a tablet or  into a smartphone. 
Optical assembly and packaging  of such devices, e.g. to form a camera module, can 
either  be handled by dedicated optical packaging and assembly houses, 
semiconductor  manufacturers , or in- house by large  customers which typically have 
these capabilities in -house .12 
5. PRODUCT MARKET DEFINI TION 
5.1. Introduction 
(19) The Transaction gives  rise to horizontal overlaps with respect to the development, 
manufacture and supply of certain optical semiconductors and, in particular, of 
certain light sensors and laser diodes . 
(20) The Transaction gives also rise to vertical links between  AMS ’ provision of micro 
packaging and assembly services for complete light s ensor and illuminator solutions 
for mobile phones and  OSRAM ’s suppl ies of LED and laser diodes.  
5.2. The Notifying Party’s view   
(21) The Notifying Party consi ders that semiconductors should be distinguished  between: 
(i) ICs; (ii) discretes; (iii) optical semiconductors; and (iv) sensors and actuators.  In 
addition, t he Notifying Party considers appropriate to further segment optical 
semiconductors (where the Par ties’ activities overlap) by the industrial sector where 
they are employed , namely (i) commercial and consumer optical semiconductors; 
and (ii) communications infrared (‘IR’) optic al semiconductors. To the Notifying 
Party’s view s uch a distinction is deemed necessary because the industry dynamics 
between these two segments appear to be fundamentally different.13  
                                                 
12  Form CO, paragraph 98.  
13  Form CO, paragraph 129.  

 
 
7 (22) The Notifying Party is also of the view that commercial and consumer optical 
semiconductors could be further distinguished by func tionality, n amely (i) LED; 
(ii) laser diodes ( e.g. vertical cavity surface emitting laser (‘VCSEL’), edge emitting 
laser (‘EEL’), which the Notifying Party considers to be part of the same product 
market ); (iii) couplers; (iv) light sensors (e.g. proximity sensors, am bient light 
sensors, colour sensors, spectral sensors , which the Notifying Party considers to be 
part of the same product market ); and (v) image sensors. According to the Notifying 
Party, devices of each category provide for different functionalities and t herefore 
from a demand -side perspective they are not interchangeable for a specific end -use 
application.14 
(23) According to the Notifying Party , narrower segment ation s are not necessary . In this 
respect, w hile the Notifying Party considers that there is limited  demand- side 
substitutability for optical semiconductors  belonging to narrower markets (for 
example, in the case of laser diodes, VCSEL and EEL)  because products belonging 
to narrower segmentations are used for  (different) specific functions , a considerabl e 
supply -side substitutability exists. The Notifying Party is of the view that most 
optical semiconductors manufacturers have capabilities across, and therefore offer a 
wide portfolio of different types of light sensors and laser diodes , which confers  
supply -side substitutability within the same category .15 According to the Notifying 
Party, t he same generally holds true for different types of LEDs, e.g. LEDs with 
different wavelength s (visible, infrared  and ultraviolet) , which are not substitutable 
from a de mand -side perspective but which many suppliers offer in their different 
types .16 
(24) With regard to assembly and packaging services for sensor solutions, the Notifying 
Party submits that a distinct market is to be analysed only where players move from 
the assembly and packaging of own single component products, to the assembly and 
packaging of solutions that include components from other suppliers next to the own 
components or exclusively .17 
(25) According to the Notifying Party, it might be plausible to further segment the 
provision of assembly and packaging services for sensor solutions  between micro -
packaging and module making . The Notifying Party argues that  the technology and 
capabilities r equired for semiconductors that are only millimetres in size are very 
different from bigger modules such as phone cameras, which are much larger in size 
and contain several different components.18  
5.3. The Commission’s precedents  
(26) In a number of previous decisions , the Commission considered that optical 
semiconductors belong to product markets  that are separate from other  
semiconductor s product markets . Consistently with the Notifying Party’s view, the 
Commission has in the past  made a clear distinction  between (i) ICs; (ii) discretes; 
(iii) optical semiconductors; and (iv) sensors and actuators . Within these categories  
                                                 
14  Form CO, paragraph 130.  
15  Form CO, paragraphs 136- 138. 
16  AMS’ reply to the Commission’s request for information RFI 2 dated 9 June 2020, paragraph 10.  
17  Form CO, paragraph 154.  
18  Form CO, paragraph 156.  
 
 
8 (but not specifically for optical semiconductors because no previous decision deals 
particularly with them) , the Commission has also distinguished a number of 
narrower separate product markets  by functionality and  by end application.19 
(27) In terms of applications, the Commission has considered in the past at least six major 
applications for semiconductor devices: communications , consumer, computer, 
military, industrial and automotive. The products designed for each of these 
applications have been  found to be not interchangeable and therefore belonging to 
separate product markets. 20   
(28) Within different  application s, the Commission  has also previously distinguished 
between groups or categories according to the functions the semiconductors are 
designed to fulfil or the types of electronic equipment they will be inserted in  
(e.g. within the market for communications applications, the Commission has 
considered that a distinction can be drawn between wireline and wireless 
applications) .21  
(29) With respect to optical semiconductors, t he Commission has defined them  as 
“devices that have either luminescent or light -receiving functionalities. Lu minescent 
devices include LED and laser diodes, while light -receiving devices include solar 
cells and photo- detectors ”.22  However, since none of the past decisions concerned 
specifically optical semiconductors, the Commission has never  considered further 
segmentations  of these specific products .  
(30) The Commission has not  dealt with packaging/ assembly services for (optical) 
semiconductors  in previous decisions.  
5.4. The Commission’s assessment  
(31) The market investigation has widely confirmed the Commission’s past practice and 
the Notifying Party’s view according to which ICs, discretes, optical 
semiconductors, and sensors and actuators  are part of separate product markets.23  
(32) With respect to the Not ifying Party’s proposed distinction between commercial and 
consumer optical semiconductors and communications IR optical semiconductors 
(supplied to data communication providers operating fibre glass, etc.) the majority of 
the market participants that resp onded to the market investigation (in particular, most 
                                                 
19  See for example: M.2820 – STMicroelectr onics/Alcatel Microelectronics ; M.2439 – 
Hitachi/STMicroelectronics/SuperH/JV ; M.4751 – STM/Intel/JV ; M.5173 – STM/NXP/JV; M.5332 – 
Ericson/STM/JV ; M.5535 – Renesas Technology/NEC Electronics; M.7585 – NXP 
Semiconductors/Freescale Semiconductor; M.7686 –  Avago/Broadcom; M.8314 –  Broadcom/Brocade; 
M.8306 – Qualcomm/NXP Semiconductors.  
20  M.2820 – STMicroelectronics/Alcatel Microelectron ics, paragraph 11, makes use of this approach, while 
narrower end -user applications are defined, e.g. in M.5332 – Ericson/STM/JV , paragraph 34, where 
semiconductors for wireless applications are considered as belonging to a product market different from 
those of other semiconductors used for communication.  
21  See for example: M.5173 – STM/NXP/JV;  M.5332 – Ericson/STM/JV ; M.7585 – NXP 
Semiconductors/Freescale Semiconductor ; M.8306 – Qualcomm/NXP Semiconductors ; M.8314 – 
Broadcom/Brocade .  
22  M.7585 – NXP Se miconductors/Freescale Semiconductor , footnote 6.  
23  Replies to questionnaire Q1 –  Automotive customers, question 6; questionnaire Q2 – Customers in 
consumer electronics, question 6; questionnaire Q3 –  Competitors, question 6.  
 
 
9 customers in consumer electronics) agreed  with the proposed distinction.24 However, 
one competitor of the Parties indicated that ‘ while the customers and their specific 
product requirements may differ between "commercial and consumer optical 
semiconductors" and "communications IR optical semiconductors", there is 
significant overlap in manufacturing and product development or R&D capabilities 
and fixed costs in these markets ’.25 
(33) The majority of the market  participants that expressed a view in the market 
investigation also agrees with the Notifying Party’s view that, from a demand- side 
perspective,  LEDs, laser diodes, couplers, light sensors and image sensors present 
limited demand -side substitutability in terms of, for example, product characteristics, 
applications and prices, and therefore they belong to separate product markets.26 
(34) One market participant, after having provided for a detailed explanation as to why it 
considers that there is an important lack  of demand -side substitutability  for the 
different categories of semiconductors considered, also underlined the lack of 
supply -side substitutability by stating that “[s] hifting production from one to the 
other would require substations  (sic) R&D effort” .27  
(35) This view is echoed by a large majority of the Parties’ competitors  that not only 
confirmed the lack of demand -side substitutability, but also pointed at a  lack of 
supply -side substitutability as  they consider that the production and supply  of LEDs, 
laser  diodes, couplers, light sensors  and image sensors  entail significantly different 
features, expertise and costs .28 
(36) Since the Transaction does not raise competition concerns irrespectively of the exact 
product market definition, the question of whether  LEDs,  laser diodes, couplers, 
light sensors and image sensors  are considered  separate product markets within 
optical semiconductors can be left open . Nonetheless , as the Parties’ activities 
overlap in the development and/or the manufactur e and supply  of certain  light 
sensors  and laser diodes, Sections  5.4.1 and 5.4.2  assess in more detail the plausible 
product market definitions for the speci fic overlapping products .  
(37) In addition, S ection s 5.4.3 and 5.4.4  also discuss two plausible product markets 
where the Transaction lead s to a vertical relationship  between the Parties , i.e. optical 
packaging and assembly services and LEDs .   
5.4.1. Light sensors   
(38) Light sensors can cover a wide range of applications and end- uses. Internal 
documents of the Parties and industry reports suggest that light sensors for different  
                                                 
24  Replies to questionnaire Q1 –  Automotive customers, question 7; questionnaire Q2 – Customers in 
consumer electronics, question 7; questionnaire Q3 –  Competitors, question 7.  
25  Reply  to questionnaire Q3 –  Competitors, question 8.1 .  
26  Replies to question naire Q1 –  Automotive customers, question 8; questionnaire Q2 – Customers in 
consumer electronics, question 8 ; questionnaire Q3 –  Competitors, question 9.  
27  Replies to questionnaire Q1 –  Automotive customers, question 8.1.  
28  Replies to questionnaire Q3 –  Competitors, questions 9 -10.  
 
 
10 applications such as automotive or consumer electronics  present distinct  
characteristics in terms of technical specifications, p rices and access to customers .29 
(39) Most of the Parties’ customers that expressed a view during the mark et investigation 
suggested that, from a demand- side perspective, light sensors for automotive 
applications and those for consumer electronics cannot be substituted by one another 
and therefore they belong to separate product markets.30 From a supply -side 
perspective, most of the competitors that replied to this question, indicated that the 
production and supply  of light sensors for consumer electronics and other light 
sensors (e.g. for the automotive industry) entail significantly different features, 
experti se and costs.31 
(40) Within light sensors, the Parties’ activities overlap  in the supply of biosensors for 
consumer electronics32 and mobile 3D ( VCSEL -based ) flood illuminators . 33  
(41) Biosensors are light sensing solution s used  to monitor and measure heart rate and 
blood pressure. Conventional blood pressure measurement can be invasive or non-
invasive. While only a licensed medic  can apply  invasive methods , non- invasive 
methods can be used directly by the patient. As such, the non- invasive method 
allows consumers to monitor and measure heart rate and blood pressure through a 
biosensing solution for private purposes, as for example during sportive activities.  
(42) Devices that include bio sensors in the mobile and consumer segment today  are 
(i) wristbands, (ii) smart watches, and (iii) mobile phones. 
(43) Biosensing can be achieved with different solutions. Typic al solutions consist of a 
light- emitting device  (LED or laser  diode ), a (light -receiving) photodiode and an 
application -specific IC or an analogue front -end IC that powers the light source and 
translates the photodiode’s signal into sensor data, which is then shared with the 
application processor of the device.  
(44) According to the Notifying P arty, the  Parties currently do not compete dire ctly for 
specific biosensing designs  or technologies , as their product offerings for such 
solutions are complementary.  [Parties’ product offerings and customers ]. Therefore, 
the Parties’ product offerings would be complementary .34 
(45) The results of the market investigation are not conclusive as to whether customers 
and competitors consider that biosensors for consumer electronics constitute a 
                                                 
29  See for example : Form CO, Annex  02 “Appendix 001_ID_LL_0078”, slide 83; Form CO, Annex 10 “Sec 
5.4_Appendix 001_ID_LL_0007”, slide 20; Form CO, Annex_21  “Yole IR LEDs and Laser Diodes 
Technology Industry 2018_ID_LL_0112”,  slides 73 -85. 
30  Replies to questionnaire Q1 –  Automotive customers, question 9; questionnaire Q2 – Customers in 
consumer electronics, question 9. The two automotive customers that disagree explained that (i) one uses 
a less granular segmentation and (ii)  the other considers that many light sensor technologies are first 
developed and used in the non- automotive sector and then find their way  into automotive applications .  
31  Replies to questionnaire Q 3 – Competitors, question  12.  
32  A biosensor  includes a light -emitting device but ultimately serves to read light -based data. Therefore, for 
the purposes of this decision, it is considered a light sensor .  
33  A 3D  flood illuminator is part of the 3D sensing system used in some smartphones. It includes a laser 
diode but ultimately serves to read the pattern in front or behind of the phone. Therefore, for the purposes 
of this decision, it is considered a light sensor .  
34  Form CO, paragraphs 298- 300.  
 
 
11 product market which is separate from other biosensors and  whether they consider 
that bio sensors for consumer electronic s based on different technologies (discrete 
components versus ICs) belong to separate product markets.35 However, s ince the 
Transaction does neither  raise competition concerns in the supply of biosensors for 
consumer electronics , where the activities of the  Parties overlap, nor in the 
narrowest -plausible market s based on different technologies, where the activities of 
the Parties do not overlap, it can be left open  whether  these products are part of a 
wider market for light sensors . 
(46) 3D flood illuminators for  mobile applications are modules used in certain 
smartphones for the purpose of “sensing” real world objects through a three -
dimensional reconstruction. A light (proximity) sensor detects the relevant object 
(e.g. a face) and switches the 3D flood illumina tor on, which subsequently shines 
infrared light using a (VCSEL) laser diode. The 3D flood illuminator is itself part of 
the 3D sensing system present in certain smartphones.  
Figure 6 Example of 3D sensing system  
 
Source: Form CO,  Figure 28.  
(47) A 3D flood illuminator (integrated in a proper 3D sensing system) placed at the front 
side of a smart phone would be typically used for functionalities such as face unlock, 
morphed emojis or gesture control.36 When the 3D flood illuminator and i ts system 
are placed at the back face of the mobile, they would typically provide 
functionalities as for example camera enhancement or augmented/virtual reality.  
(48) The results of the market investigation are not conclusive as to whether customers 
and competi tors consider that mobile 3D flood illuminators constitute a separate 
product market or if they are part of a wider product market for light sensors from 
demand - and supply -side perspectives.37 However, s ince the Transaction does not 
raise competition conce rns in the narrowest -plausible market for  3D flood 
illuminators  for mobile applications , it can be left open  whether  these products are 
part of a wider market for light sensors . 
                                                 
35  Replies to questionnaire Q2 –  Customers in consumer electronics, questions 10 and 12 and questionnaire 
Q3 – Competitors, questions 13, 17 and 18.   
36  Front -facing mobile 3D sensing systems started with the introduction by Apple of facial recognition in 
2017 with a structured light solution for its iPhone Fa ce ID-technology. Nowadays, all major smart phone 
manufacturers have at least one smart phone model that includes front -facing mobile 3D sensing .  
37  Replies to questionnaire Q2 –  Customers in consumer electronics, question s 10 and 12 and questionnaire 
Q3 – Competitors, questio ns 13, 17 and 18.   

 
 
12 (49) In conclusion, t he market investigation suggests  that light sensors likely belong to a 
product market  that is separate from other optical semiconductors . Moreover, l ight 
sensors developed and sold for different end -uses (e.g. consumer electronics, 
automotive, etc .) appear to have very limited demand - and supply - side 
substitutabilit y, and therefore they likely belong to separate product markets. Further 
segmentations by functionality , e.g. biosensors  for consumer electronics  and mobile 
3D flood illuminators , would be possible  in principle , but the market investigation 
did not provide  for a clear indication in this respect.  Ultimately, the definition of the 
relevant product market for the assessment of light sensors can be left open as  the 
Transaction does not lead to any competition concerns irrespective of whether  light 
sensors  are considered a distinct product market  or a part of a wider market for 
optical semiconductors, or whether  biosensors for consumer electronics (and 
segmentations by technology therein) or mobile 3D flood illuminators are considered  
as separate product markets .38 
(50) Accordingly, since the Parties’ activities overlap in  biosensors for consumer 
electronics  and mobile 3D (VCSEL -based) flood illuminators , the competitive 
assessment in Section 7.2 deals with  for optical semiconductors overall, light sensors 
overall, biosensors for consumer electronics  and mobile 3D (VCSEL -based) flood 
illuminators . 
5.4.2. Laser diodes  
(51) Laser diodes are light -emitting devices used  in many different devices (including 
light sensors) and applications, including for instance the automotive and consumer 
electronics, for which  the activities of the Parties overlap. Laser diodes  include 
VCSEL, EEL and other technologies .  
(52) Most of the Parties’ customers  that expressed a view during the market investigation 
suggested that , from a demand- side perspective,  laser diodes for automotive 
applications and those for consumer electronics cannot be substituted by one another 
and therefore they belong to separate produc t markets.39 The results of the market 
investigation are however not conclusive as to whether, from a supply -side 
perspective, the production and supply  of laser diodes for automotive applications 
and those for consumer electronics entail significantly diff erent features, expertise 
and costs.40 
(53) Regarding the supply  of laser diodes , the Parties’ current overlapping activities are 
very limited and relate solely to VCSEL  for different  final application s.41 Within 
VCSEL , [information about the Parties’ business strategy ]. For this reason, and in 
view of the importance of this  fast evolving technology , this section discuss es the 
product market definition for laser diodes (VCSEL, EEL) for LiDAR .  
                                                 
38  The segmentation by technology used within biosensors is not relevant for the assessment of the 
Transaction as the activities of the Parties do not overlap in the different technologies . Therefore, this 
potential segmentation will not be further addressed herein.  
39  Replies to questionnaire Q1 –  Automotive customers, question 11 and questionnaire Q2 – Customers in 
consumer electronics, question 13.  
40  Replies to questionnaire Q3 –  Competitors, question 21.  
41  Where in 2019 OSRAM generated global sales  of c. EUR […]  and AMS generated global sales of 
EUR  […]. 
 
 
13 (54) LiDAR is a technology that uses light in the form of a pulsed laser for measuring 
variable distances . In the automotive sector, LiDAR has started to be developed 
since 2017 for Advanced Driver Assistance Systems (‘ ADAS ’) in vehicles such as 
emergency braking, p edestrian detection and collision avoidance. LiDAR is one out 
of different (competing) sensing systems for ADAS, which will become relevant in 
autonomous driving in the mid-  to longer -term future.  
(55) Overall, the development of ADAS can be segmented into five  main phases, starting 
with manual driving  (level 0 ), where the driver does everything  and up to full 
automation  (level 5)  where a driver is no longer needed. Between these two points, 
different development levels exist which require different functionalit ies to allow for 
the automation of interim steps, such as speed limit observation, autonomous 
highway driving, etc. LiDAR solutions  become relevant from ADAS l evel 3 
upwards.42  
(56) The key components of LiDAR systems are the laser and the receiver. Regarding t he 
laser  component , two main types of laser diodes  can be used for its manufacturing , 
namely EEL, where the laser light propagates in a direction along the wafer surface 
of the semiconductor chip and is reflected or coupled out at a cleaved edge; and 
VCSEL , where the light propagates in the direction perpendicular to the 
semiconductor wafer surface.   
(57) Generally, EELs are more powerful and therefore can travel greater distances, 
whereas VCSELs have a very narrow laser beam that enables very accurately 
directed sensing but are much less powerful and therefore cannot cover long 
distances.  
(58) [Information about the Parties’ business strategy ]. 
(59) The results of the market investigation are not conclusive as to whether market 
participants consider that, from a demand- side perspective, EELs and VCSELs (for 
LiDAR systems) belong to separate product markets.43 One competitor indicated that 
‘EEL and VCSELs for Lidar have similar technical specifications, applications and 
pricing’.44 However, one customer  indicated that ‘ EEL and VCSEL have different 
geometry, temperature behaviour and power ’.45 Another customer explained that  
‘[EELs] provide a much higher power level per aperture (…) whereas VCSEL can 
provide a much better addressability of multiple single apertures ’.46 From a s upply -
side perspective, t he results of the market investigation are not  conclusive either as 
to whether  the production and supply  of VCSELs and EELs entail significantly 
different features, expertise and costs so that VCSELs and EELs belong to different 
product markets.47  
                                                 
42  In level 3 the vehicle performs longitudinal and lateral driving tasks, recognizes its limits ad handles 
emergency situation, however the vehicle may ask the driver to take over with sufficient time margin .   
43  Replies to questionnaire Q1 –  Automotive customers, question 12 and questionnaire Q3 –  Competitors, 
question 2 2.  
44  Reply  to questionnaire Q3 –  Competitors, question 22.1.   
45  Reply to questionnaire Q1 –  Automotive customers, question 12.1.  
46  Reply to questionnaire Q1 –  Automotive customers, question 12.1.  
47  Reply  to questionnaire Q3 –  Competitors, question  23.  
 
 
14 (60) In conclusion, the  market investigation suggests that laser diodes  likely belong to a 
product market that is separate from other optical semiconductors. A further 
distinction by technology, i.e. VCSEL and EEL, also appears to be widely supported 
by customers and suppliers due to the limited demand- side and supply -side 
substitutability. Moreover, laser diodes  developed and sold for different end- uses 
(e.g. consumer electronics, automotive, etc.) appe ar to have very limited demand -
side substi tutability , although from a supply -side perspective, it is not clear whether 
they belong to separate product markets . A narrower segmentation for laser diodes 
for LiDAR  and further segmentations thereof (VCSEL versus EEL) would be 
possible in principle, but the market investigation did not provide for a clear 
indication in this respect. However, since sales of VCSEL for LiDAR are very 
limited and expected to remain so at least for the next 5 years, a distinction between 
VCSEL and EEL for LiDAR is not deemed necessary for the purpose of the present 
decision. Ultimately, since the Transaction does not raise competition concerns in 
any of the  market definitions for laser diodes  set out above , the precise product 
market definition  can be left open .  
(61) Accordingly, since the Parties’ activities overlap in VCSEL for consumer 
electronics, and potentially in LiDAR , the competitive assessment in Section 7.2 is 
conducted for optical semiconductors overall, laser diodes , VCSEL , and laser diodes 
for LiDAR . 
5.4.3. Assembly and packaging services for sensor solutions  
(62) Manufacturers of sensor solutions  assemble and pack single component s to produce 
the final product . For this, they can use their own and/or other suppliers’ 
components. During the market investigation, compe titors were asked whether the 
provision of micro -packaging and assembly services for light sensor solutions and 
other optical assembly and packaging services entail significantly different features, 
expertise and costs , as suggested by the Notifying Party . However, whereas it would 
appear  that there is  some common know -how, the replies obtained were very limited 
and not conclusive.48 Ultimately, the definition of the relevant product market for the 
provision of a ssembly and packaging services for sensor solutions for mobile phones 
can be left open , as the Transaction does not raise competition concerns 
irrespectively of  the product market definition. 
5.4.4. LEDs  
(63) An LED is a small single light- emitting diode that comprises a semiconductor chip 
and its housing. It emits light when electric current passes through it. The colour of 
the light is determined by the energy required for electrons to cross the band gap of 
the semiconductor, rangi ng from violet to red and white.  
(64) The market investigation suggests that LEDs  likely belong to a product market that 
is separate from other optical semiconductors.49 Moreover, the supply of LEDs can 
be further segmented between (a) visi ble and invisible LEDs  (the latter potentially 
                                                 
48  Reply to questionnaire Q3 –  Competitors, question 24.  
49  Replies to questionnaire Q1 –  Automotive customers, question 8; questionnaire Q2 – Customers in 
consumer electronics, question 8; questionnaire Q3 –  Competitors, questions 9 -10. 
 
 
15 sub-divided by IR and UV); (b) a utomotive and general lightning; (c) by light 
colour ; and (d) by power output. 
(65) Ultimately, since the Transaction does not raise competition concerns in the 
narrowest -plausible m arket within  LEDs, it can be left open if these products are part 
of a wider market  for LEDs . 
5.4.5. Conclusion on product market  definition  
(66) The Commission concludes that  ICs, discretes, optical semiconductors, and sensors 
and actuators are part of separate produ ct markets . However, as the Transaction does 
not raise competition concerns irrespectively of the exact product market definition, 
the question of whether light sensors , laser diodes  and LEDs constitute separate 
product markets within optical semiconductor s can be left open. Likewise, whether 
further segmentations of the  product categories  where the activities of the Parties 
overlap or give rise to a vertical relationship ( biosensors for consumer electronics, 
mobile 3D flood illuminators, VCSELs for LiDAR, visible LEDs, invisible IR 
LEDs, invisible UV LEDs, automotive LEDs, general lighting LEDs, LEDs of 
different colours, LEDs of different outputs)  are appropriate can be left open.  
(67) Moreover , the definition of the relevant product market for the provision of a ssembly 
and packaging services for sensor solutions can be left open , as the Transaction does 
not raise competition concerns irrespectively of  the product market definition. 
6. GEOGRAPHIC MARKET DEF INITION  
6.1. The Notifying Party’s view   
(68) The Notifying Party considers that the demand and supply of optical 
semiconductors, including potentially narrower product markets, are worldwide in 
scope.50 
(69) According to the Notifying Party, the investments required for research and 
development, as well as for manufacturing, requires sales to be very large, and 
therefore global in nature. Manufacturers of optical semiconductors typically 
manufacture their products in a few  manufacturing plants (often located in Southeast 
Asia), and ship them at global level. This practice is f acilitated by well -accepted  
international technical standards, low transportation costs and the absence of 
significant import taxes and duties.  In support of its claim for a global geographic 
scope, the Notifying Party observes that all the major market re ports collect and 
report global market data. In addition, the Notifying Party submits that the Parties’ 
sales strategies [ information about the Parties’ business strategy ].51  
6.2. The Commission’s precedents  
(70) In past decisions, the Commission has consistently consider ed the geographic scope 
of semiconductor markets, including optical semiconductors, to be at least EEA -
wide, if not worldwide in scope . 
                                                 
50  Form CO, paragraph 146.  
51  Form CO, paragraph 147.  
 
 
16 (71) In M.2820 – STMicroelectronics/Alcatel Microelectronics , the Commission 
considered that the market for semiconduct ors in general is worldwide  in scope.  
(72) In M.2439 – Hitachi/STMicroelectronics/SuperH/JV , M.4751 – STM/Intel/JV , and 
M.5173 – STM/NXP/JV the Commission acknowledged that the market for 
semiconductors in gener al has the connotation of worldwide market, but it ultimately 
left open the question as if it should be considered EEA -wide or worldwide in scope.  
(73) In M.7585 – NXP Semiconductors/Freescale Semiconductor , where optical 
semiconductors are explicitly mentioned as a particular type of semiconductors, the 
Commission concluded that that there are strong indications in support of a 
worldwide market geographic scope, but it ultimately left the precise geographic 
market definition open.  
(74) In M.7686 – Avago/Broadcom , the Commission considered that the market for 
semiconductors, which optical semiconductors are considered part of, is worldwide 
in scope and assessed potential competition concerns accordingly.  
6.3. The Commission’s assessment  
(75) The market investigation confirms the Commission’s findings in p revious cases that 
the market for optical semiconductors is at least EEA -wide in scope , with important 
global characteristics .  
(76) A large majority of the Parties’ customers  and competitors that replied to the mar ket 
investigation consider s that competitive c onditions for light sensors (prices, delivery 
time, active suppliers, etc.) are generally the same on a worldwide level .52 Most 
customers indicated that the selection of their suppliers of light sensors is typically 
independent of their location.53 In additi on, most competitors indicated that their 
customers of light sensors are typically located in regions of the world that might be 
different from the region where the sensors are manufactured.54 Moreover, most 
customers and competitors that replied to the market investigation consider that 
transport cost has little or no impact on  imports and exports  of light sensors as they 
can be cost -effectively transported from/to different regions of the world.55 
(77) Simila rly, a large majority of the Parties’ customers and competitors that replied to 
the market investigation consider that competitive conditions for laser diodes (prices, 
delivery time, active suppliers, etc.) are generally the same on a worldwide level .56 
Most customers indicated that the selection of their suppliers of laser diodes is 
typically independent of their location.57 In addition, most competitors indicated that 
                                                 
52  Replies to questionnair e Q1 – Automotive customers, question 13, questionnaire Q2 –  Customers in 
consumer electronics, question 14 and questionnaire Q3 –  Competitors, question 25.  
53  Replies to questionnaire Q1 –  Automotive customers, question 14 and questionnaire Q2 – Customers  in 
consumer electronics, question 15.  
54  Reply to questionnaire Q3 –  Competitors, question 26.  
55  Replies to questionnaire Q1 – Automotive customers, question 15, questionnaire Q2 –  Customers in 
consumer electronics, question 16 and questionnaire Q3 –  Competitors, question 27.  
56  Replies to questionnaire Q1 – Automotive customers, question 17, questionnaire Q2 –  Customers in 
consumer electronics, question 18 and questionnaire Q3 –  Competitors, question 29.  
57  Replies to questionnaire Q1 –  Automotive custo mers, question 18 and questionnaire Q2 – Customers in 
consumer electronics, question 19.  
 
 
17 their customers of laser diodes are typically located in regions of the world that 
might b e different from the region where the sensors are manufactured.58 Moreover, 
most customers and competitors that replied to the market investigation consider that 
transport cost has little or no impact on  imports and exports  of laser diodes as they 
can be co st-effectively transported from/to different regions of the world.59 
(78) Therefore , consistently with precedent Commission’s cases, and supported by the 
market investigation in the present case, the geographic scope of the market for 
optical semiconductors and of its plausible narrower segments appear to have 
important worldwide connotations and therefore can be considered at least EEA -
wide in scope  and most likely  worldwide . However, the precise scope can be left 
open because the Transaction does not raise comp etition concerns irrespectively of 
the precise geographic market definition.  
7. COMPETITIVE ASSESSMEN T 
7.1. Legal framework of the assessment  
(79) Under Article 2(2) and (3) of the Merger Regulation, the Commission must assess  
whether a proposed concentration would si gnificantly impede effective competition  
in the internal market or in a substantial part of it, in particular through the creation  
or strengthening of a dominant position. In this respect, a merger can entail  
horizontal and/or non- horizontal effects.  
(80) Horiz ontal effects are those deriving from a concentration where the undertakings 
concerned are actual or potential competitors of each other in one or more of the 
relevant markets concerned. The Commission appraises horizontal effects in 
accordance with the Ho rizontal Merger Guidelines.60 
(81) According to paragraph 26 of the Horizontal Merger Guidelines , a number of factors 
need to be assessed, and a non- exhaustive list of relevant  factors that might lead to a 
significant impediment to effective competitions are explained in paragraphs 27- 38. 
Accordingly, Sections 7.2.1 to 7.2.6 of the present decision assess, respectively, 
market shares and HHI, closeness of competition between the Parties, important 
dynamics of the markets  where the Parties’ activities overlap, the alternatives  to the 
Parties and barriers to entry, buyer power of the Parties’ customers, and the impact 
that the main market participants expect from the Transaction. Based on all these 
factors considered together, conclusions on horizontal non- coordinated effects are 
drawn in Section 7.2.7.  
                                                 
58  Reply to questionnaire Q3 –  Competitors, question 30.  
59  Replies to questionnaire Q1 – Automotive customers, question 19, questionnaire Q2 –  Customers in 
consumer electronics, question 20 and questionnaire Q3 –  Competitors, question 31.  
60  Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings (‘Horizontal Merger Guidelines’), OJ C 31, 05 .02.2014.  
 
 
18 (82) As regards non- horizontal effects, the Commission Non- Horizontal Me rger 
Guidelines61 distinguish between the effects of vertical mergers, which involve 
companies operating at different levels of the supply chain, and of conglomerate 
mergers, which involve companies that are active in closely related markets.  
(83) According to paragraph 23 of the Non- Horizontal Merger Guidelines, non- horizontal 
mergers pose no threat to effective competition unless the merged entity has a 
significant degree of market power in at least one of the markets concerned.  
Section  7.3 assesses whether post -Transaction the merged entity would have 
sufficient market power to raise vertical or conglomerate competition concerns.  
(84) The Horizontal Merger Guidelines and the Non- Horizontal Merger Guidelines 
distinguish between two main ways in which mergers may significantly impede 
competition, namely non -coordinated or coordinated effects. The present Section 7 
assesses successively whether the Transaction is likely to raise horizontal, vertical or 
conglomerate non -coordinated effects on the markets examined in Sections 5 and 6. 
7.2. Horizontal non -coordinated effects  
7.2.1. The Parties have low to moderate combined market shares under any plausible 
market definition  
(85) The Notifying Party provided market shares estimates for both EEA -wide and global 
geographic markets  in the supply of the overlapping products . Since most data 
available from  third parties or from the Parties’ internal intelligence concern global 
sales, estimates of EEA market shares are limited to those of the Parties and do not 
include their competitors.  
(86) With respect to  the supply of  optical semiconductors overall , Table 1 below reports 
the Notifying Party’s estimates of the Parties’ and their competitors’ global market 
shares for the years 2017 -2019. The table shows that for the period 2017 -2019, the 
Parties’ combined market share was well below 20%, and specifically, it was 
[5-10]% in 2017, [5-10]% in 2018 and [5 -10]% in 2019. The table also shows that 
post-Trans action, the merged entity would continue to compete with a number of 
global competitors . These global competitors include,  for example, Sony 
Semiconductors, which in 2019 ha d a global market share of [20- 30]% in the supply 
of optical semiconductors , Samsung Electronics (with a market share of [5 -10]% 
in 2019) , Nichia (with a market share of [5 -10]% in 2019), and Broadcom (with a 
market share of [5 -10]% in 2019).  
                                                 
61  Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings (‘Non -Horizontal Merger Guidelines’) (2008/C 265/07).  
 
 
19 Table 1 Global market shares for optical semiconductors for the years 2 017-2019 
 2017  2018  2019  
EUR 
m Share  EUR 
m Share  EUR m  Share  
AMS  […] [0-5]% […] [0-5]% […] [0-5]% 
OSRAM  […] [5-10]% […] [5-10]% […] [0-5]% 
Parties ’ combined  […] [5-10]% […] [5-10]% […] [5-10]% 
Sony  Semiconductor 
Solutions Corporation […] [10-20]% […] [10-20]% […] [20-30]% 
Samsung Electronics  […] [5-10]% […] [5-10]% […] [5-10]% 
Nichia  […] [5-10]% […] [5-10]% […] [5-10]% 
Broadcom Limited  […] [5-10]% […] [0-5]% […] [5-10]% 
Omnivision  […] [0-5]% […] [0-5]% […] [0-5]% 
Lumileds  […] [0-5]% […] [0-5]% […] [0-5]% 
Seoul  Semiconductor  […] [0-5]% […] [0-5]% […] [0-5]% 
MLS  […] [0-5]% […] [0-5]% […] [0-5]% 
STMicroelectronics  […] [0-5]% […] [0-5]% […] [0-5]% 
ON Semiconductor  […] [0-5]% […] [0-5]% […] [0-5]% 
Others  […] [30-40]% […] [30-40]% […] [30-40]% 
Total  […] 100%  […] 100%  […] 100%  
Source: Form CO, table 9.  
(87) In a hypothetical EEA -wide market , the Notifying Party estimates that AMS’ market 
share for optical semiconductors in 2019 would remain [5 -10]%, while OSRAM’s 
market share would be [20-30]%,62 leading to a combined market share below 
[30-40] %. As explained in paragraph (85) , the Notifying Party [ information about 
the Parties’ business strategy ].   
(88) The Not ifying Party provided market shares for the supply of  optical semiconductors 
according to its proposed distinction of the intended fi eld of use , namely 
communications IR optical semiconductors , and commercial and consumer optical 
semiconductors . Since the activities of the Parties do not overlap in c ommunications 
IR optical semiconductors , the Notifying Party provided only market shares 
concerning commercial and consumer optical semiconductors , which, as shown 
in Table 2, do not materially differ from those concerning optical semiconductors 
overall.  
(89) As the Notifying Party explains , total sales of  commercial and consumer optical 
semiconductors  (EUR […] in 2019)  are very similar to those of  optical semi -
conductors overall (EUR […] in 2019) and the Parties are only active in relation to 
commercial and consumer optical semiconductors (and therefore their sales in 
commercial and consumer optical semiconductors also  represent their sales in optical 
                                                 
62  The Notifying Party estimates OSRAM’s sales of s emiconductor at EUR […]  for LED , EUR […] for light 
sensors and EUR […] for laser diodes, which sum -up to EUR […] . As the EEA market size is estimated at 
EUR […], OSRAM’s market share would amount to [20 -30]%. 
 
 
20 semiconductors overall). This explains why market shares for commercial and 
consumer optical semiconductors  do not exhibit material differences with those for 
optical semiconductors overall.    
Table 2 Global m arket shares for  commercial and consumer optical semiconductors 
2017- 2019 
 2017  2018  2019  
EUR 
m Share  EUR 
m Share  EUR 
m Share  
AMS  […] [0-5]% […] [0-5]% […] [0-5]% 
OSRAM  […] [5-10]% […] [5-10]% […] [0-5]% 
Parties ’ combined  […] [5-10]% […] [5-10]% […] [5-10]% 
Sony  Semiconductor 
Solutions Corporation […] [10-20]% […] [10-20]% […] [20-30]% 
Samsung Electronics  […] [5-10]% […] [5-10]% […] [5-10]% 
Nichia  […] [5-10]% […] [5-10]% […] [5-10]% 
Broadcom Limited  […] [0-5]% […] [0-5]% […] [0-5]% 
Omnivision  […] [0-5]% […] [0-5]% […] [0-5]% 
Lumileds  […] [0-5]% […] [0-5]% […] [0-5]% 
Seoul Semiconductor  […] [0-5]% […] [0-5]% […] [0-5]% 
MLS  […] [0-5]% […] [0-5]% […] [0-5]% 
STMicroelectronics  […] [0-5]% […] [0-5]% […] [0-5]% 
ON Semiconductor  […] [0-5]% […] [0-5]% […] [0-5]% 
Others  […] [30-40]% […] [30-40]% […] [30-40]% 
Total  […] 100%  […] 100%  […] 100%  
Source: Form CO, table 10  
(90) With respect to a potential EEA -wide market definition, the Notifying Party’s 
estimate of the market shares for commercial and consumer optical semiconductors  
are the same as those for optical semiconductors overall, i.e. [5 -10]%, for AMS and 
about [20-30]% for  OSRAM , which lead to a combined market shares 
below  [30- 40]%.63 
(91) Due to the immaterial difference in sales between optical semiconductors overall and 
commercial and consumer optical semiconductors , this distinction is not further 
considered in the competitive assessment.   
(92) With respect to light sensors , Table 3 reports the Notifying Party’s estimates of the 
Parties ’ and their competitors’ global market shares for the years 2017- 2019. Since 
the Notifying Party was not able to estimate the sales of a number of its competitors 
for the year 2019, market shares of these competitors are estimated in ranges.  
                                                 
63  Assuming that also in the EEA, the sales of communications IR optical semiconductors  are very small 
compared to the sales of commercial and consumer optical semiconductors .   
 
 
21 (93) The Parties’ combined market share for the supply of light sensors in 2019 is 
estimated at [30- 40]%, with an increment brought by OSRAM of [0 -5]%. While the 
exact market share of the merged entity’s main com petitor (STMicroelectronics) 
in 2019 cannot be estimated, the Notifying Party provides a range of 30- 40%, which 
suggests that the merged entity would be of a similar size of its largest competitor. 
Table 3 also shows that there ar e a number of competitors of the same size of 
OSRAM or even larger active in the market for  light sensors.  
Table 3 Global m arket shares in light sensors  for the years 2017 -2019  
 2017  2018  2019  
EUR  m Share  EUR  m Share  EUR  m Share  
AMS  […] [20-30]% […] [20-30]% […] [20-30]% 
OSRAM  […] [0-5]% […] [0-5]% […] [0-5]% 
Parties ’ combined  […] [20-30]% […] [20-30]% […] [30-40]% 
STMicroelectronics  […] [30-40]% […] [30-40]% N/A 30-40% 
Maxim  […] [5-10]% […] [5-10]% N/A 5-10% 
Broadcom (Avago)  […] [5-10]% […] [0-5]% N/A 0-5% 
Lite-On […] [0-5]% […] [0-5]% N/A 0-5% 
Sensortek (Sitronix)  […] [0-5]% […] [0-5]% N/A 0-5% 
Capella/Vishay  […] [0-5]% […] [0-5]% N/A 0-5% 
TXC  […] [0-5]% […] [0-5]% N/A 0-5% 
Elan […] [0-5]% […] [0-5]% N/A 0-5% 
Sharp  […] [0-5]% […] [0-5]% N/A 0-5% 
Rohm  […] [0-5]% […] [0-5]% N/A 0-5% 
Others  […] [10-20]% […] [5-10]% N/A 5-10% 
Total  […] 100%  […] 100%  […] 100%  
Source: Form CO, table 12.  
(94) Considering the market shares of the year 2018, which have been estimated in a 
more precise way, and not as ranges, the HHI before and after the Transaction are, 
respectively, […] and […], and therefore the HHI variation after the Transaction 
(also referre d to as the delta) is 130. According the Horizontal Merger Guidelines, 
“[t]he Commission is unlikely to identify horizontal competition concerns in […] a 
merger with a post -merger HHI above 2  000 and a delta below  150” .64 
(95) With respect to a potential EEA -wide scope of the market for light sensors , in 2019 
AMS generated about EUR […]  from the sales of light sensors in the EEA, which is 
estimated to represent a market share below 10%.65 In the same year, OSRAM’s 
sales of light sensors in the EEA were EUR […] , corresponding to a market share 
[5-10]%.66 Therefore, the Parties’ combined market share for light sensors in the 
EEA is estimated to be below 20%.  
(96) Within light sensors, the Notifying Party provided also market shares concerning the 
supply of biosensors for c onsumer electronics  and mobile 3D flood illuminators .  
                                                 
64  Horizontal Merger Guidelines, paragraph 20.  
65  Form CO, paragraph 168 letter a.  
66  The Parties’ reply to request for infor mation RFI 2, question 4.  
 
 
22 (97) With respect to biosensors , the Parties overlap only regarding consumer electronics. 
[Information about the Parties’ business strategy ].67 
(98) The Parties’ combined global market share in the supply of biosensors for 
consumer electronics  in 2020 is estimated to be [30- 40]% (AMS: [0-5]% and 
OSRAM [30-40]%) with an estimated total market volume of EUR […] . As the 
Notifying Party was not able to provide market shares for biosensors only , the above 
figures  also reflect  sales of different biosensor  components , whereas the market size 
refers to biosensors for consumer electronics excluding components . Therefore the 
Parties’ sales appear to be to a large extent overestimated.  
(99) When the Parties’ sales of biosenso r components are considered, most of the merged 
entity’s sales would be from OSRAM’s sales of [ information about the Parties’ 
sales ]. In contrast, AMS’ sales  [information about the Parties’ sales ], and represent 
only [0-5]% of the overall biosensor for consumer electronics sales in 2020 in value. 
Therefore, at worst, the Transaction would lead to a small increase of the market 
shares .    
(100)  After the Transaction, Maxim would remain the largest competitor of the merged 
entity in biosensors  for consumer electronics  with an estimated global market share 
of [30-40]%. The second largest competitor would be Broadcom with [10- 20]% 
market share. Other competitors with smaller market shares, such as ADI and TI 
(each with market shares estimated at [5 -10]%) would  also compete with the merged 
entity in the supply of biosensors  for consumer electronics .  
(101)  As explained in Section 7.2.3, the markets for optical semiconductors, and in 
particular the one  for biosensors, are growing considerably (the market size of 
biosensors  for consumer electronics  is expected to increase from EUR […]  in 2020 
to EUR […]  by 2025) and is fast evolving thus market shares are expected to  change 
rapidly from year to year. Therefore, in order to assess if the market shares of the 
Parties are expected to grow in the future,  the Notifying Party provided forecasts for 
the year 2025. The Notifying Party estimates that by 2025 the merged entity’ s 
market share would decrease to [20- 30]%, at par with Maxim. In addition, by 2025 
TI is expected to grow substantially, i.e. to [10- 20]%, thus increasing its competitive 
constrain to the merged entity.  
(102)  According to the Notifying Party, the changes in mar ket shares from 2020 to 2025 
will occur due more competition in discrete photodiodes ( [information about the 
Parties’ business strategy ]), and a market preference for integrated solutions  
([information about the Parties’ business strategy ]). 
(103)  With respect to 3D flood illuminator s for mobile applications , [information about 
the Parties’ business strategy ], therefore only global market shares are provided. Due 
to the lack of industry reports regarding in particular 3D flood illuminator s for 
mobil e applications , market shares estimates are prepared by the Notifying Party 
based on the best of its knowledge. The Notifying Party considers that in the years 
2019 and 2020 no appreciable changes occurred in terms of sales and market shares, 
and therefore  its estimates for the years 2019 and 2020 are identical.   
                                                 
67  Form CO, paragraph 305.  
 
 
23 (104)  The Parties’ combined market share in the supply 3D flood illuminator s for mobile 
applications amounts to [10- 20]% globally and each of the Parties have similar 
market shares before the Transactio n (i.e. about [5 -10]%). In addition, after the 
Transaction, the merged  entity’s market share will be well smaller than that of its 
largest competitor, Trumpf/Philips, which has a market share of [60- 70]%.68 
(105)  With respect to laser diodes , Table 4 reports the Notifying Party’s estimates of the 
Parties’ and its  competitors’ worldwide market shares for the years 2017- 2019. The 
Parties’ combined market share in 2019 is [10- 20]% with an increment of [0 -5]%. 
After the Transaction, the merged entity’s largest competitor would remain Nichia 
with sales about three times larger than the merged entity’s. Lumentum, with 
[10-20]% market shares worldwide  would remain the second largest s uppliers of 
laser diodes, while the merged entity would have sales of similar order of magnitude 
of other competitors such as Mitsubishi, Panasonic Corporation and Sony 
Semiconductor Solutions.  
Table 4 Global m arket shares for laser diodes for the years 2017 -2019  
 2017  2018  2019  
EUR m  Share  EUR m  Share  EUR m  Share  
AMS  […] [0-5]% […] [0-5]% […] [0-5]% 
OSRAM  […] [10-20]% […] [10-20]% […] [10-20]% 
Parties ’ combined  […] [10-20]% […] [10-20]% […] [10-20]% 
Nichia  […] [10-20]% […] [20-30]% […] [30-40]% 
Lumentum  […] [10-20]% […] [10-20]% […] [10-20]% 
Mitsubishi  […] [10-20]% […] [10-20]% […] [5-10]% 
Panasonic Corporation  […] [10-20]% […] [5-10]% […] [5-10]% 
Sony Semiconductor 
Solutions  […] [5-10]% […] [5-10]% […] [5-10]% 
ROHM  Semiconductor  […] [5-10]% […] [0-5]% […] [0-5]% 
Sumitomo Electric Device 
Innovations  […] [5-10]% […] [0-5]% […] [0-5]% 
Renesas Electronics 
Corporation  […] [0-5]% […] [0-5]% […] [0-5]% 
Sharp Electronics  […] [0-5]% […] [0-5]% […] [0-5]% 
Hamamatsu Photonics  […] [0-5]% […] [0-5]% […] [0-5]% 
Others  […] [0-5]% […] [0-5]% […] [0-5]% 
Total  […] 100%  […] 100%  […] 100%  
Source: Form CO, table 11  
(106)  With respect to a potential EEA -wide scope of the market for laser diodes, the 
Transaction would not lead to any overlap between the activities of the Parties 
[information about the Parties’ business strategy ].69 
(107)  Within laser diodes, the Notifying Party has  provided market share information for 
the supply of laser diodes for LiDAR , [information about the Parties’ business 
strategy ].70 The Notifying Party estimates that [information about the Parties’ 
                                                 
68  Form CO, table 15.  
69  Form CO, paragraph 168 letter a.  
70  [Information about the Parties’ business strategy ]. 
 
 
24 business strategy ] the combined worldwide market share of t he Parties  in laser 
diodes for LiDAR may reach c. [20- 30]%.71 The Notifying Party expects that at least 
Hamamatsu, Excelitas, II -VI/Finisar, Lumentum, Trumpf/Philips, and Trilumina will 
be able to secure market positions that  are (at least) comparable to th e combined 
market position of the merged entity. In general, for laser diodes for LiDAR, 
according to the Notifying Party,  future EEA market shares will be similar to global 
market shares due to the strong global position of European automotive 
manufacturers  and Tier -1 suppliers.72 
(108)  Regarding VCSEL  only, the Notifying Party estimate s that in 2019 AMS will have a 
market share of [0 -5]% and OSRAM of [0-5]%, the combined market share being  
[5-10]%.73 However, an industry report upon on which the Partie s rely in their 
ordinary course of business ,74 indicates higher market shares for AMS and 
potentially for OSRAM. Nevertheless, as explained below , the Parties’ combined 
market share would in any event remain below 30%.  
(109)  According to such industry report,  in 2017 Princ eton Optronics (now part of AMS) 
had a global market share of [5 -10]%, which grew to [10- 20]% in 2018 ( Figure 7). 
OSRAM is not mentioned as a major supplier and therefore its market shares are not 
stated explicitly  in the report . Instead, the  report  estimates the  market share of all the  
other VCSEL at 14% . Therefore, even assuming that OSRAM accounted for a large 
part of the market share allocated to “others” suppliers, the Parties’ combined market 
share would still remain below 30%.  
(110)  In conclusion, the market investigation has shown that the Parties’ combined market 
share in VCSEL is below 30%. 
                                                 
71  Form CO, paragraph 276.  
72  Form CO, paragraph 277.  
73  Form CO, paragraph 196 and the Notifying Party’s reply to request for information RFI 4, question 2.  
74  The Notifying Party disagrees with the approach used for estimating VCSEL market shares in this report, 
see Notifying Party’s reply to request for information RFI 4, question 2.  
 
 
25 Figure 7 Global market shares for VCSEL fo r the years 2017 and 2018 
 
Source: Form CO, Annex 23 ”Status of the Solid- State Lighting Source Industry 2019_ID_LL_0114” [A 
report from Yole Développement (Yole), 2019 edition], slide 228 [emphasis added by the Commission]  
7.2.2. In most of the plausible produc t markets, t he Parties do not appear to compete 
closely   
(111)  The Horiz ontal Merger Guidelines explain  that “[p]roducts may be differentiated 
within a relevant market such that some products are closer substitutes than others. 
The higher the degree of substitutability between the merging firms' products, the 
more likely it is that the merging firms will raise prices  significantly” .75 
(112)  As explained in Section 5, the market for optical semiconductors appear s to be 
highly differentiated in a number of products with specific end- uses and 
functionalities, and many of them  could potentially constitute  separate product 
market s. Therefore, the present section assesses  if the Parties compete closely in the  
plausible markets  considered  in Section 5.4.  
(113)  As explained in Section 7.2.1, for each plausible product market definition, the 
merged entity’s market shares are either small  or the increments brought about by 
the Transaction appear to be limited. This is consistent with the fact  that, as shown 
below, the Parties either do not compete closely  or that competitors taken together 
(but often also individually) have higher market shares than the merged entity  in the 
relevant markets . 
(114)  First , the Parties ’ products are based on technologies that are to a large extent  
complementary . 
(115)  As an OSRAM’s customer active in automotive explain s, “OSRAM is the global 
leader and the only European supplier of LED for aut omotive applications [and  a] 
close competitor to OSRAM is the Japanese Nichia” , whereas “AMS is strong in 
                                                 
75  Horizontal Merger Guidelines, paragraph 28.  

 
 
26 sensors, including optical sensors, which are to large extent sold to Apple  for 
manufacturing smartphones”.76  
(116)  A competitor of  the Parties further expl ained that while it regards AMS as one of its 
main competitors in light receiving optical semiconductors  (as for example light 
sensors and image sensors) , it does not regard OSRAM as a strong competitor 
because it  is mainly active in light emitting optical semiconductors  (as for example 
LEDs) : “[…] OSRAM is primarily a lighting company, with activities in proximity 
light sensors (where AMS is also present) but with a limited market position” . With 
respect to the combination of the Parties’ products, the sam e market participant 
explained that “ [b]y acquiring OSRAM, AMS will reinforce its overall position and 
may generate synergies in segments such as, e.g., under -display solutions (i.e., 
perfect screens for smartphones or watches) and biosensors (for applicat ions such 
as vital signs monitoring and spectrometry) ”.77 
(117)  For the limited products for which the activities of the Parties do overlap, there is 
also a  high  degree of technology complementarity.  
(118)  With respect to laser diodes , OSRAM realises [ information about  the Parties’ 
revenues ] with EEL laser diodes and […]  with VCSEL. AMS sells [ information 
about the Parties’ business strategy ]. However, while competition between the 
Parties in VCSEL appears to be limited (one automotive customer stated that “ [a]s 
Osram only recently stated activities on VCSEL there is only minor competition 
yet”78), from a technology point of view, the Parties’ VCSEL products appear to 
have similar technical characteristics, as some market participants recognised during 
the market investi gation.79 
(119)  As explained in Section 5.4.2, [information about the Parties’ business strategy ]. In 
this respect,  one could envisage  a competition between the Part ies in developing new 
products leading to future competition for the sales of similar products . However, 
there is currently a high degree of  uncertainty  regarding the LiDAR market uptake  
and therefore it is uncertain how the market conditions will be once LiDAR p roducts 
are deployed. Therefore, the results of the market investigation do not support a 
conclusion that the  Parties will in the future compete closely for the manufacture and 
sales of LiDAR solutions  in the future.  
(120)  With respect to light sensors , both the Parties sell biosensors  for consumer 
electronics and 3D flood illuminators for mobile  applications .  
(121)  Regarding biosensors  for consumer electronics , while OSRAM provide s solutions 
and components [ information about the Parties’ business strategy ], AMS pr oduce s 
biosensors and components [ information about the Parties’ business strategy ].  
(122)  Figure 8, which shows an AMS’ internal document produced in its ordinary course 
of business , corroborates that [ information from internal documents ].  
                                                 
76  Minutes of a call with a customer on 18 May 2020, paragraphs 7 and 9.  
77  Minutes of a call with a competitor on 24 April 2020, paragraphs 21- 22.  
78  Replies to questionnaire Q1 –  Automotive customers, question 30.1  
79  See for example, Replies to questionnaire Q2 –  Customers in consumer electronics, question 28.1.  
 
 
27 Figure 8 […] 
[…] 
Source: Form CO, Annex 29, Appendix 003, slide 6.  
(123)  Second , the Parties focus on different customers : while AMS’ activities are focused 
on optical semiconductors for consumer electronics, OSRAM has a strong focus on 
automotive applications.  
(124)  A tier 1 supplier of automotive OEMs , which is considering  AMS , among other s, as 
a potential supplier of laser diodes  for LiDAR , explained that the complementarity of 
the Parties in terms of customer focus would lead to a positive impact of the 
Transaction on the market. More specifically, this market participant explained that 
“[…] if AMS loses its main customer after the lifetime of its smartphones 
agreements (i.e. this can happen every 1- 2 years), significant financial troubles 
might occur in the middle of the lifetime of the supply agreement for automotive 
products that the Company needs to deliver to its customers. In thi s respect, the 
acquisition of OSRAM by AMS would have a positive impact because AMS would be 
able to diversify its risks by relying on a larger number of customers active in 
different markets”.80 
(125)  [Information from internal documents ].  
Figure 9 […] 
[…] 
Source: Form CO, Appendix 014 (ID_LL_0020), slide 4  [emphasis added by the Commission]  
(126)  Third , the Parties appear to have a different geographic focus . In 2019, while 
OSRAM realised […]  in the EEA (that is, EUR […]  in the EEA, compared to a 
worldwide turnover of  EUR […]), AMS realised only […] % of its turnover in the 
EEA (that is, EUR […] in the EEA, compared to a worldwide turnover of 
EUR  […] ).81  
(127)  Fourth , a majority of the market participants that expressed a view d uring the 
market investigation does not consider the Parties as close competitors  and instead 
consider that AMS and OSRAM offer complementary or different products in terms 
of technical specifications, price, and quality. This view regards specifically: li ght 
sensors overall, light sensors for consumer electronics, biosensors, 3D flood 
illuminators for mobile , laser diodes overall, and laser diodes for LiDAR.82  
(128)  A number of  market participants consider  that the Parties offer similar product s with 
respect to 3D flood illuminators for mobile  world -facing applications. However, for 
the reasons explained in Section s 7.2.1 and 7.2.3 to 7.2.6, the Transaction does not 
raise competition concerns  with respect to the 3D flood illuminators for mobile  
offered by the Parties.  
                                                 
80  Minutes of a call with a customer on 18 May 2020, paragraphs 10- 11. 
81  Form CO, table 3.  
82  Replies to questionnaire Q1 –  Automotive customers, question 29; Questionnaire Q2 –  Customers in 
consumer electronics, question 29;  and Questionnaire Q3 –  Competitors, question 37.  
 
 
28 (129)  Therefore, the Parties cannot be regarded as close competitors  neither in the overall 
market for optical semiconductors nor in most  plaus ible narrower product markets , 
the possible exception being in VCSEL  and 3D floor illuminators, for which , to 
some extent, the Parties appear to compete relatively closely.83 However, 
notwithstanding this competition between the Parties , the Transaction does not raise 
competition concerns for the reasons explained in Sections  7.2.1 and  7.2.3 to 7.2.7. 
7.2.3. Fast evolving products and market  dynamics  do not allow the Parties to acquire 
market power  
(130)  Optical semiconductors, and, as such, both light sensors and laser diodes are fast 
evolving products and each product released by suppliers would typically become 
obsolete within a relatively short period of time. Therefore, for the reasons explained 
below, the Parties have limited or no possibility to acquire market power vis -à-vis 
their suppliers. 
(131)  First , a large majority of the market participants that expressed a view during the 
market investigation does not consider that either light sensors or laser diodes are 
part of a mature market where no major changes are expected.84 On the contrary, a 
majority of the marke t participants either expects market changes in the near future, 
or consider product s and technologies still under development and therefore the 
market s as a “future market [s]”.85 
(132)  A customer of the Parties , which describes itself as a “distributor of electr onic 
components of all varieties, including light sensors and laser diodes from different 
manufacturers” , and therefore with a wide view of different optical semiconductor 
products, explained that “our industry is very dynamic and therefore always 
evolving . More often they drive or enable future markets” .86   
(133)  Another customer, which is active in the automotive sector, explained that while the 
technologies themselves are well -established, there is an “increasing automation in 
particular of transport [that]  will create a large number of new applications”. The 
same market participant explains that this is the reason for the market evolution.87 
(134)  Another customer of the Parties, which is a supplier of automotive OEMs, further 
explains  how the market deployment of la ser diodes and light sensors evolved in the 
automotive sector and that important cost reductions are to be expected due to a 
large scale employment of these products : “The market of Automotive HMI [which 
uses light sensors]  is slowly evolving as market has initially been established for 
premium cars later on evolving towards intermediate cars. 3D TOF (time of flight) 
and Lidar markets are nascent in Automotive and there is an important pressure 
from car manufacturers to obtain price reduction from their part suppliers […]  to 
give to the latters access to large volumes. As such, the technologies have to evolve 
                                                 
83  Replies to questionnaire Q2 –  Customers in consumer electronics, question s 29, 29.1, 30, 30.1; Replies to 
questionnaire Q3 –  Competitors, question 3 7; Form CO, paragraphs 204 and 315.  
84  Replies to questionnaire Q1 –  Automotive customers, question 21; Questionnaire Q2 –  Customers in 
consumer electronics, question 22; and Questionnaire Q3 –  Competitors, question 34.  
85  Replies t o questionnaire Q1 –  Automotive customers, question 21; Questionnaire Q2 –  Customers in 
consumer electronics, question 22; and Questionnaire Q3 –  Competitors, question 34.  
86  Replies to questionnaire Q2 –  Customers in consumer electronics, question 22 .1. 
87  Replies to questionnaire Q1 –  Automotive customers, question 21 .1 
 
 
29 in order to drastically cut their development and manufacturing costs. Since light 
sensors and laser diodes are import ant parts of the bill of materials (BOM) of part 
suppliers […]  they are subject to such cost pressure”.88 
(135)  Second , laser diodes and light sensors are subject to a relatively short replacement 
cycle, which ultimately drives innovation in developing new or improved products. 
(136)  A market participant which is globally active in manufacturing and selling consumer 
electronics explained that “[t]o the best of our knowledge and understanding, the 
average lifespan (and replacement cycle) of consumer electronics including mobile 
devices is relatively shorter than those of other products, which means that the 
replacement cycle of the light sensors incorporated in the consumer electronics is 
also relatively short. Shorter lifespan and replacement cycle seem to cause somehow 
fast evolution in the product and technology, thus making the market dynamic” .89  
(137)  The same market participant also explained that “[c]onsumer electronics including 
Smartphones, smart watches, and smart wristbands are quickly evolving, and this 
also leads to fast evolution in the light sensors technology, which is essential to 
support many functions provided through the consumer electronics (e.g., health, 
fitness tracking, and air quality monitoring) ”.90 
(138)  For automotive applications, replacement cycles can be e xpected to be longer 
because automotive vehicle models are typically sold for about 4 to 6 years, 
compared to, for example,  smartphone s that can be sold for about 2- 3 years.  
However, with respect to light sensors, a market participant active in the automotive 
sector explained  that the innovation cycle remains relatively short. W hile the 
production for a given product is expected to last for 4 to 6 years plus 10 years of 
maintenance, the frequency of introduction of new light sensors to new vehicle 
models is  about 2 to 3 years, and for some  light sensors  this can be as short as 1 to 
2 years.91  
(139)  Therefore, while manufacturers continue the production of light sensors for up to 
10 years, they need to continue innovate in order to introduce to the market new 
products every 1 to 3 years. 
(140)  Third , with respect to VCSEL in particular, which is an area where the Parties offer 
and develop similar products, the market appears to be evolving at important rate.  
(141)  A large majority of the automotive customers that expressed  a view during the 
market investigation consider that VCSEL for LiDAR applications belong to a future 
market where products and technologies are still under development.92 One market 
participant active in consumer electronics, when commenting about the evol ution of 
the various optical semiconductor markets, identified in particular VCSEL as an area 
                                                 
88  Replies to questionnaire Q1 –  Automotive customers, question 21 .1  
89  Replies to questionnaire Q2 –  Customers in consumer electronics, question 2 4.1. 
90  Replies to questionnaire Q2 –  Customers in consumer electronics, question 22.1.   
91  Replies to questionnaire Q1 –  Automotive customers, question 2 5.2  
92  Replies to questionnaire Q1 –  Automotive customers, question 21. 
 
 
30 dynamic changes are expected and stated that “ [f]or VCSELs there is most dynamics 
present, in particular for the higher power arrays ”.93 
(142)  As Figure 7 shows, the overall market size of VCSEL more than doubled from the 
year 2017 to 2018, i.e. in this period it changed from USD […]  to USD […]. 
Another slide of the same document shows  that the VCSEL market is expected to 
substantially grow from 2018 to 2024, more specifically the related compound 
annual grow rate (‘CAGR’) in this period is estimated to be [ 30-40]%.94  
(143)  Figure 7 also shows how volatile market shares can be from one year to the next. For 
example, Prince Optronics (which now belongs to AMS) increased its market share 
from [5-10]% to [10- 20]%, while Fini sar’s market shares, for example, in the same 
period went from [10-20]% to [10- 20]%. A note in the same slide of the report states 
that [ information from an industry report ]. 
(144)  In this respect , any of the 50 companies identified in Figure 10 might potentially 
erode market shares of the Parties  in the near future . 
Figure 10 VCSEL manufacturers   
 
Source: Form CO, Annex 23 ”Yole Status of the Solid -State Lighting Source Industry 2019_ID_LL_0114” [A 
report from Yole Développement (Yole), 2019], slide 227  
(145)  In conclusion, all the evidence in the file suggests that the f ast evolving products and 
market dynamics do not allow the Parties to acquire ma rket power  in the potential 
markets for laser diodes , light sensors, biosensors for consumer electronics, mobile 
3D flood illuminators and VCSELs for LiDAR . 
                                                 
93  Replies to questionnaire Q2 –  Customers in consumer electronics, q uestion  26.2.  
94  Form CO, Annex 23”Status of the Solid- State Lighting Source Industry 2019_ID_LL_0114” [A report 
from Yole Développement (Yole), 2019 edition], slide 220  

 
 
31 7.2.4. A number of capable competitors offer viable alternatives to the Parties and barriers 
to entry do not seem to prevent new market entrants  
(146)  A large number of market participants are active in the manufacture and supply of 
optical semiconductors. The small combined market share of the Parties, and the 
large number of competitors shown in Table 1 well illustrates that the Parties face 
strong competition from a number of optical semiconductor manufacturers.  
(147)  However, since not all manufacturers  supply  the same types of opt ical 
semiconductors , the present section assesses the various alternatives to the Parties, 
for the plausible product markets defined in Section 5.4. 
(148)  With respect to light sensors , the Parties’ competitors include STMicroelectronics 
(Switzerland , with a global market share of 30- 40%), Maxim (US , with a global 
market share of 5 -10%) and Broadcom (US , with a global market share of 0 -5%) 
among others. With respect to bios ensors for consumer electronics ADI (US , with a 
global market share of 5 -10%), TI (US , with a global market share of 5 -10%), 
Broadcom (with a global market share of [10- 20]%), Maxim  (with a global market 
share of [30- 40]%) and various Asian suppliers (e.g. Pixart, Parton, and Epicore)  
compete with the Parties. With regard to 3D flood illuminators for mobile, the 
Parties compete  mainly with Trumpf/Philips, which has a global market share of 
[60-70]%, and to a lesser extent with Lumentum, and II -VI/Finisar.  
(149)  With respect to laser diodes , the Parties’ competitors include Nichia (Japan , with a 
global market share of [30- 40]%), Lumentum (US , with a global market share of 
[10-20]%), Mitsubishi  Electronics Corporation (Japan , with a global market share of 
[5-10]%) and Panasonic Corporation (Japan, with a global market share of [5 -10]%) 
among others. In automotive LiDAR  a number of suppliers are active, including 
suppliers of  laser diode such as Lumentum, Trumpf/Philips  (Germany) , II-VI/Finisar  
(US) and  Hamamatsu (Jap an), which AMS expects to  be able to secure market 
positions comparable to the combined market position of AMS/OSRAM .95  
(150)  These suppliers exercise  important competitive constraints on the Parties for the 
following reasons.  
(151)  First , a majority of the Parties’ competitors that expressed a view during the market 
investigation consider that the markets for optical semiconductors are either “very 
competitive ” or “ somehow competitive  i.e. the number of suppliers or potential 
suppliers is  similar to other markets which [they]  consider relatively competitive ”.96 
(152)  When asked to rate the Parties’ competitors, a  large majority of the Parties’ 
customers  that expressed a view during the market investigation consider ed that for 
both laser diodes overall and light sensors overall, the Parties’ competitors either are 
numerous and strong or exist even  if not all of them are as strong as the Parties.97  
                                                 
95  Form CO, paragraph 276.  
96  Replies to questionnaire Q1 –  Automotive customers, question  22 and questionnaire Q2 – Customers in 
consumer electronics, question 23.  
97  Replies to questionnaire Q1 –  Automotive customers, question  31 and questionnaire Q2 – Customers in 
consumer electronics, question  31. 
 
 
32 (153)  This opinion appears to be equally shared by both automotive and consumer 
electronic customers , even i f for consumer electronics customers appear to be even 
less concerned than automotive customers .  
(154)  When the question wa s asked for specific products, in some cases, the perception of 
the existence of a large number of competitors decreased . This is the case  for 
example,  of VCSEL . While an automotive customer stated that after the Transaction 
“[t]here is still a sufficient number of potential suppliers left” ,98 some customer s 
consider that the number of valid suppliers is somehow limited . However, as 
explained  in the next paragraphs , due to the potential market entrance of new 
suppliers this does not seem to be a concern for most customers.  
(155)  Secon d, for the limited cases where there are less suppliers available on the market , 
the Parties’ customers do not appea r to be concerned about barriers to entry and are 
confident that new suppliers might enter the market. 
(156)  As a tier -1 automotive supplier explained, “[t]echnical requirements for a given 
system with 3D TOF or laser diodes are generally so high that a maximum of three 
suppliers can reach the required performance. Sometimes, it is even limited to one 
or two suppliers. In the case of VCSEL, a part supplier such as [name of the 
Company]  may even have to assist (through training, audit, sometimes financial 
support)  its suplier to allow it to reach technical expectancies from the Automotive 
market.”99 This view suggests that barriers to entry do not preclude new suppliers to 
enter the market, especially because certain customers might facilitate their market 
entrance.  
(157)  Several  customers of the Parties that replied to the market investigation observed 
suppliers of laser diodes and light sensors  entering the market in the last 5 years , and 
expects  new entrants  in the next 3 years.100 The observation of new market entrants 
appears to be slightly lower for automotive  end uses , where more stringent 
requirements related to safety aspects exist and therefore more time is needed for a 
new supplier to enter the market. However, as one of the Parties’ customers observed 
“[d]ue to the preparation for autonomous driving a huge number of start -ups are on 
the way to developing into an automotive supplier company” . 
(158)  Regarding VCSEL , for which market participants seem to consider that less 
competitors are present on the market, an industr y report upon which the Parties rely 
in their ordinary course of business explains that the VCSEL business attracts a 
number of new entrants from neighbouring markets, and more in particular from the 
LED market, but also start -ups are willing to enter this  market ( Figure 11).  
                                                 
98  Replies to questionnaire Q1 –  Automotive customers, question 45.1.  
99  Replies to questionnaire Q1 –  Automotive customers, question 22.1.  
100  Replies to questionnaire Q2 –  Customers in consumer electronics, question s 32-33 and Replies to 
questionnaire Q1 –  Automotive customers, question s 33-34. 
 
 
33 Figure 11 Potential new entrants in the VCSEL market  
 
Source: Form CO, Annex 24 “Yole VCSELs Market and Technology Trends 2019_ID_LL_0115” [A report 
from Yole Développement (Yole), 2019 edition], slide 29 [emphasis added by the Commission]  
(159)  Regarding 3D flood illuminators for mobile applications, which both the Parties 
manufacture and sell, an internal document of AMS  produced in its ordinary course 
of business illustrates the competitive landscape for the entire level of its supply 
chain ( Figure 12). AMS considers that [ information from ams’ internal documents ]. 
(160)  [Information from  ams’  internal documents ]. 
Figure 12 […] 
[…] 
Source: Form CO, Annex 29 “003_ID_LL_0093”, slide 10  
(161)  The merged entity will continue to face competition from a number of credible 
competitors and potential new entrants, including (i) laser diode suppliers which may 
expand into the down- stream assembly of com plete illuminator modules 
(e.g. leading VCSEL -suppliers Lumentum, II -VI/Finisar, Trumpf/Philips); 
(ii) contract manufacturers  (‘CM’)101 that source the relevant input components from 
laser diode suppliers (e.g. Sunny Optical); and (iii) Asian optical solution providers 
with own in- house capacities for optical components (e.g. Himax). 
(162)  Third , in case of a hypothetical price increase of either las er diodes or light sensors , 
a large majority of the Parties’ customers indicated that they would not pay for the 
price increase and instead they would  switch to other suppliers offering  similar 
products .102  
                                                 
101  The expression “Contract Manufacturers” refers to companies to which certain manufacturing processes 
are outsourced.   
102  Replies to questionnaire Q2 –  Customers in consumer electronics, questions 34- 35 and Replies to 
questionnaire Q1 –  Automotive customers, questions 35 -36. 

 
 
34 (163)  In conclusion, it appears that a number of capable  competitors offer viable 
alternatives to the Parties and barriers to entry do not seem to prevent new market 
entrants . Therefore the merged entity would not have sufficient market power for 
increasing prices after the Transaction.  
7.2.5. The customers of the Par ties have a certain degree of countervailing buyer power 
and price re -negotiations typically lead to price reductions  
(164)  The present section demonstrates that for a number of reasons , the customers of the 
Parties have a certain degree of countervailing buyer power and price re -negotiations 
typically lead to price reductions . 
(165)  First , due to the relatively short replacement cycles of optical semiconductors, the 
Parties’ customers are not subject to lock -in effects and therefore they can switch to 
other suppliers in case of price increase.  
(166)  Both consumer electronic OEMs and automotive tier -1 suppliers typically select 
their suppliers during the design phase of their products, and once the suppliers are 
selected they prefer not to change them  during the production phase.103 However, 
during this period, which is 2 to 3 years for consumer electronics and 4 to 6 years for 
automotive customers (see Section 7.2.3), the Parties’ customers are not subject to  
any type of lock -in effect for two main reasons.  
(167)  In the first place, and particularly for consumer electronics OEMs, the replacement 
cycle of optical semiconductors is relatively short and a hypothetical price increase  
would give its benefits for a short period of time. In contrast, attempting to increase 
price might result in not being selected for the next consumer electronic model (say, 
for example, a smartphone or a smart watch ).  
(168)  In the second place, both consumer electronics OEMs and automotive tier -1 
suppliers develop different products in parallel and therefore the Parties  are 
considered as potential suppliers far more frequently than once in the replacement 
cycle of optical semiconductors. Therefore, any attempt  of the Parties to exert 
market power vis -à-vis a certain customer would be subject to retaliation for any 
other upcoming product that such a customer is developing. For instance, consumer 
electronic products such as smartphones are typically introduced ev ery 2 to 3 years. 
Considering that a smartphone  OEM would typically supply  a portfolio of 
smartphones , it would select suppliers of optical semiconductors much more 
frequently than every 2 to 3 years.   
(169)  In the automotive sector , new models are introduced less frequently than in 
consumer electronics. However, as explained in paragraph (138) , new light sensors 
for new vehicle models , for example,  are ex pected about every 2 to 3 years, and for 
some  this can be as short as 1 to 2 years.  
(170)  Therefore, while in principle it could be possible to lock- in their customers for the 
entire production period of a certain final product, in practice the Parties attempt to 
sell their products to each of their customers on a frequent regular basis, and 
                                                 
103  Replies to questionnaire Q1 –  Automotive customers , question 41 and questionnaire Q2 – Customers in 
consumer electronics, question  41. 
 
 
35 therefore they do not have enough market power to raise price s during the 
production phase of a certain final product.  
(171)  Second , in the market s where the Parties sell their overlapping products , a limited 
number of powerful buyers are  typically  present. Due to the fundamental differences 
in market structures between automotive and consumer electronics, these are 
analysed separately.  
(172)  With respect to automotive customers, as expl ained in Section 5.4, the Parties do not 
have any overlapping activities with respect to sales to automotive customers, 
[information about the Parties’ product devel opment ].  
(173)  The Notifying Party submits that potential tier -1 automotive suppliers that 
[information about the Parties’ business strategy ].104  
(174)  These companies are large in size (and often much large than the Parties) and rely on 
sophisticated purchasing practices and dedicated purchasing department s and 
therefore they would be able to exert some level of buyer power on the merged 
entity.  
(175)  With respect to customers active in consumer electronics, the Parties typically sell 
their products directly to consume r electronic OEMs, which are typically large 
multinational companies active on a global level  such as for example [ information 
about customers ]. These companies are large in size (and often much large than the 
Parties) and rely on sophisticated purchasing practices and dedicated purchasing 
departments and therefore they would be able to exert some level of buyer power on 
the merged entity.  
(176)  In addition, each of these consumer electronics OEMs  would typically purchase 
from the Parties a large amount of produc ts, which in some case s represent a large 
share of each of the Parties’ revenues.105 Losing any of these customers, and in 
particular the largest ones, would result in a major loss of revenues for the Parties . 
For this reason, consumer electronics OEMs enjoy  some level of buyer power  vis-à-
vis the Parties .  
(177)  This is particularly the case because, as explained in Section 7.2.3, consumer 
electronic OEMs would typically change the type or the model of the optical 
semiconductors they use (and therefore, potentially , their suppliers) every 2 to 
3 years , and they also produce different products in parallel, and therefore a potential 
retaliation due to an attempted price increase would affect  the Parties in the short 
term.    
(178)  Third , with respect  to of 3D flood illuminators for mobile , consumer electronics 
OEMs  generally engage at different levels of integration, which poses a constraint on 
suppliers of pre -assembled modules.  
(179)  Whilst some customers procure optical components (such as VCSEL) and rely on 
own or third- party optical assembly capabilities to create the relevant modules and 
3D systems, others procure modules such as flood illuminators or even entire 3D 
                                                 
104  Form CO, Annex 37.  
105  Form CO, paragraphs  21. 
 
 
36 systems including the relevant software. In this regard, the Parties only compete for 
the supply of [ information about the Parties’ business strategy ].106  
(180)  Mobile man ufacturers seem able to shift from modules to individual components or 
vice versa and decide anew for each mobile phone model at which level of the value 
chain to buy relevant input products. Consequently, the Parties and any supplier 
active at module level is under threat that the customer shifts demand to the 
component level (in -sourcing assembly or replying on third- party assemblers). In 
this regard, according to the Notifying Party, mobile manufacturers assemble around 
75% of the flood illuminators asse mbled today in terms of value .107 
(181)  Fourth , and as a result of the market power that the Parties’ customers typically 
have, any price renegotiation occurring for supply of optical semiconductors would 
typical ly result in a price decrease.  
(182)  Both automotive and consumer electronics customers typically have supply 
agreements with the Parties covering the entire production period, and, to some 
extent covering after market sales. However, prices  would typically be subject to 
negotiation on yearly basis. As a market participant explained “supply contract is 
just a framework, but the price is agreed in the orders, which would be adjusted 
during the contract terms ”.108 
(183)  A large majority of the market participants that expressed a view in the market 
investigation indicated that the most likely outcome of a price -renegotiation is a 
price decrease. This indication is consistently provided by all market participants 
(i.e. irrespectively if they are active in automotive, in consumer electronics or if they 
are competitors of the Parties) and across all the product ranges they purchase (in 
case of the Parties’ customers) or they offer (in case of the Parties’ competitors).109 
(184)  A tier -1 automotive supplier explained that “[e] very year, the prices are 
renegotiated. Most of them will follow the contract, [Company name] will push for 
price decreases, and since the product evolution is fast and the markets attractive, 
we will use new business awards to get from our suppliers price decreases whenever 
possible ”.110  
(185)  The trend of reducing pri ces over the years, and therefore applying price pressure on 
the Parties, appear s to be common for both consumer electronics and automotive 
customers. As one market participant explained , “[p]rices for components have 
historically decreased due to higher v olumes and also products reaching maturity or 
end of life” .111 
                                                 
106  [Information about the Parties’ customers and products ].  
107  Form CO, paragraphs 314 and 322.  
108  Replies to questionnaire Q2 –  Customers in consumer electronics, question 36.1. 
109  Replies to questionnaire Q 1 – Automotive customers , question 38; Replies to questionnaire Q2 –  
Customers in consumer electronics, question 37; Replies to questionnaire Q3 – Questionnaire to 
competitors, question 48.  
110  Replies to questionnaire Q1 –  Automotive customers, question 38 .1. 
111  Reply to questionnaire Q2 –  Customers in consumer electronics, question  37.1.  
 
 
37 (186)  In conclusion, the Commission considers  that the customers of the Parties have a 
certain degree of countervailing buyer power and price re -negotiations typically lead 
to price reductions . 
7.2.6. A major ity of market participants appear to be either not concerned or supportive of 
the Transaction 
(187)  During the market investigation, a large majority of the respondents appeared neutral 
or supportive of  the Transaction  when asked about the overlapping  areas . 
(188)  With regard to light sensors  in particular , a large majority of customers in consumer 
electronics that replied to the market investigation indicated that they do not expect 
the acquisition of OSRAM by AMS to have any impact on their businesses.112 In 
addition, the majority of customers that provided a reply to this question during the 
market investigation consider that the Transaction will have neutral  or positive 
impact s in the EEA with regard to price, quality , product range, innovation and 
security of supply  of light sensors .113 
(189)  One automotive customer explained that ‘ [c]onsidering the small number of capable 
suppliers, the acquisition of OSRAM by AMS is positive for [customer  name] , seen 
as an opportunity to reinforce a capable supplier without market distortion ’.114 
(190)  Another customer in consumer electronics sta ted that ‘ [b]oth [AMS and OSRAM  
are] excellent suppliers, we would welcome the combination’.115  
(191)  One competitor indicated that, post -Transaction, the Parties would have ‘better 
negotiation power, and critical mass and lower cost in their product ’ and ‘a 
powerful combined IP portfolio’.116 However, as another competitor explained, ‘ [i]t 
is assumed that Osram and AMS [ will be able ] to offer more light sensor solutions 
by the combination of their products which would have impact to our business to a 
certain extent, however, it should not change the landscape in a significant manner 
since there are many suppliers existing in the marke t’.117 In addition, several 
competitors indicated that they expect the Transaction to increase innovation  for 
light sensors .118   
(192)  With regard to laser diodes , most competitors and customers that replied to this 
question during the market investigation indicate d that they do not expect the 
acquisition of OSRAM by AMS to have any impact on their businesses.119 
Moreover, the majority of the customers that provided a reply to this question during 
the market investigation consider that the Transaction will have neutra l or positive 
                                                 
112  Reply to questionnaire Q2 – Customers in consumer electronics , question 4 2.  
113  Replies to questionnaire Q1 –  Automotive customers, question 44  and questionnaire Q2 – Customers in 
consumer electronics , quest ion 4 3. Positive impact is assessed as a potential increase in quality, product 
range, innovation and security of supply and a potential decrease in prices.  
114  Replies to questionnaire Q1 –  Automotive customers, question 43.1.  
115  Reply to questionnaire Q2 – Customers in consumer electronics , question 4 2.1. 
116  Reply to questionnaire Q3 –  Competitors, question 50.1.  
117  Reply to questionnaire Q3 –  Competitors, question 50.1.  
118  Reply to questionnaire Q3 –  Competitors, question 51.  
119  Reply to questionnaire Q1 – Automotive customers, question 45, questionnaire Q2 – Customers in 
consumer electronics, question 44 and questionnaire Q3 –  Competitors, question 52.  
 
 
38 impact in the EEA with regard to price , quality , product range, innovation and 
security of supply of  laser diodes.120 
(193)  One customer in consumer electronics indicated that ‘ [s]ince OSRAM and ASM are 
two major players in the market, it might cause  a less competitive market after [the]  
acquisition’.121 However, another customer in consumer electronics explained that 
‘there will be a small overlap and therefore cleansing of portfolio, but it will be 
minor compared to the positive effects of more innovation ’.122  
(194)  With regard particularly to VCSEL, o ne automotive  customer stated the Transaction 
would lead to ‘[o]nly one potential supplier for VCSEL that disappears. There is still 
a sufficient number of potential suppliers left ’.123 
7.2.7. Conclusions on horizontal non- coordinated effects  
(195)  In light of the considerations in Section s 7.2.1- 7.2.6 and based on the results of the 
market investigation and on all the information available to it, the Commission 
concludes that the Transaction does not raise serious doubts as t o its compatibility 
with the internal market with respect to horizontal non -coordinated effects.  
7.3. Vertical non -coordinated effects  
7.3.1. Description of the vertical links and market context  
(196)  The Transaction gives rise to potential vertical links between AMS’ provision of 
assembly and packaging services for sensor solutions  for mobile phones 
(downstream) and OSRAM’s supplies of laser diodes  and LED (upstream).  
(197)  Any potential vertical effects of the Transaction would only raise if glo bal markets 
are considered as AMS [ information about the Parties’ business strategy ].124 
[Information about the Parties’ business strategy ].  
(198)  For the provision of assembly and packaging services AMS  [information about the 
Parties’ business strategy ]. Therefore, any vertical relation between AMS’ and 
OSRAM’s activities would be theoretical in nature as we take into account 
OSRAM’s capabilities .125 
(199)  In the potential upstream market for the supply of laser diodes, the Parties’ combined 
worldwide market share amounted to [10- 20]% in 2019 with an increment of [0 -5]%. 
Regarding VCSEL  only, [information about the Parties’ business strategy ].  
(200)  In the potential upstream market for the supply of LEDs, OSRAM’s market share 
amounts to [5 -10]% worldwide (2019). In the supply of visible and invisible light 
LEDs, OSRAM’s market shares amount to [5 -10]% and [10- 20]% worldwide 
                                                 
120  Replies to questionnaire Q1 –  Automotive customers, question 46 and questi onnaire Q2 – Customers in 
consumer electronics, question 45.  
121  Reply to questionnaire Q2 – Customers in consumer electronics , question 4 4.1. 
122  Reply to questionnaire Q2 – Customers in consumer electronics , question 4 4.1. 
123  Replies to questionnaire Q1 –  Automotive customers, question 45.1.  
124  Mobile phone manufacturing is predominantly done in China and Korea .  
125  Form CO, paragraph 337.  
 
 
39 (2019), respectively. In the supply of infrared and ultraviolet LEDs, OSRAM’s 
market shares amount to [20- 30]% and [0 -5]% worldwide (2018), respectively. 
OSRAM was not able to provide reliable market shares for the potential sub-
segmentations by colour or power. However, OSRAM estimates its share for visible 
LEDs in the red colour spectrum to be around [20- 30]% and for the white colour 
spectrum to be a round [10-20]% worldwide. As regards LEDs in different power 
classes, OSRAM’s reported market share in the high -power segment is around 
[10-20]%. In the mid-  and low -power segment, OSRAM’s reported share is around 
[0-5]%. OSRAM’s position in high- power LED s is not relevant for the assessment 
of the Transaction [ information about the Parties’ business strategy ]. 
(201)  With regard to  the provision of assembly and packaging services for sensor solutions 
for mobile phones , the Notifying Party indicated that market shares are not available 
and therefore worldwide market shares for mobile camera modules should be  used as 
a proxy .126 With this in mind, the Notifying Party estimates that AMS’ market share 
in the global market for the provision of assembly and packaging services for sensor 
solutions for mobile phones  amounts to [0 -5]% (2018). 
7.3.2. The Commission’s assessment  
(202)  According to the Non -Horizontal Merger Guidelines , non- horizontal mergers pose 
no threat to effective competition unless the merged entity has a  significant degree of 
market power  in at least o ne of the markets concerned.127 In this regard, market  
shares provide useful first indications of the market power and the competitive 
importance of the merging parties  and t he Commission is unlikely to find c oncern in 
non-horizontal mergers  where the market share post -merger of the new entity in each 
of the markets concerned is below 30% .128  
(203)  The Transaction does not result  in any vertically affected market as the market 
shares of the Parties in the downstream m arket (provision of assembly and 
packaging services for sensor solutions for mobile phones ) and upstream markets 
(supply  of laser diodes and LED s) remain below 30%.  
(204)  Moreover, the  Commission finds that the merged entity would have  insufficient 
market power to foreclose competitors in the supply of laser diodes or LED markets 
through customer foreclosure strategies. In this regard, AMS’ downstream market 
share in the provision of assembly and packaging services for sensor solutions for  
mobile phones  ([0-5]%) is not indicative of such ability. Suppliers of laser diodes or 
LED s will have access to a sufficient customer base. Other providers of optical 
packaging and assembly services  are LG Innotek, Semco, Foxconn, Liteon, Sunny 
Optical, O -Film and Q -Tech.  
(205)  Likewise , the Commission finds that input foreclosure is unlikely to arise, as the 
merged entity would have insufficient market power to foreclose competitors 
downstream through the input foreclosure of laser diodes or LED components for 
mobile phones and there are sufficient alternative sources of supply for customers, 
such as Nichia, Lumileds, Seoul Semiconductor, MLS, etc.  
                                                 
126  Form CO, paragraph 351.  
127  Non-Horizontal Merger Guidelines, paragraph 23.  
128  Non-Horizontal Merger Guidelines, paragraphs 24- 25. 
 
 
40 (206)  Therefore,  the merged entity is unlikely to have the market power  to engage in any 
foreclosure strategy after the T ransaction . In line with this, during the market 
investigation market participants did not express concerns about any potential (input 
or customer) foreclosure strategy from the merged entity post -Transaction.  
(207)  Based on the results of the market investigati on and on all the evidence available to 
it, the Commission concludes that the Transaction does not raise serious doubts as to 
its compatibility with the internal market with regard to vertical non -coordinated 
effects.  
7.4. Conglomerate effects  
(208)  According to the Non -Horizontal Merger Guidelines , conglomerate effects may arise 
in mergers between companies that are active in closely related markets.129 The main 
concern in the context of conglomerate mergers is that of foreclosure  and the 
possibility that the combination of products in related markets may confer on the 
merged entity the ability and incentive to leverage a strong market position from one 
market to another by means of tying or bundling or other exclusionary practices.130 
(209)  Generally, the merged entity will be nefit from a significant scale, engineering 
capabilities and financial strength. However, as one market participant indicated,  
‘some of the same manufacturing fixed costs can be leveraged [across]  several of 
these [optical semiconductors]  product areas leading to better economics and ability 
to offer customers lower prices ’.131 Indeed, w hile the combination of AMS and 
OSRAM will increase the number of optical semiconductors that both Parties can 
supply, this is unlikely to give rise to harm to competition  for the following reasons . 
(210)  First , the combined market share of the Parties’ remains below 20% on any 
plausible market except from laser diodes in the EEA and light sensors and 
biosensors for consumer electronics globally. In the supply of la ser diodes in the 
EEA, the activities of the Parties do not overlap. In the supply of light sensors and 
biosensors for consumer electronics globally, the increment brought about by the 
combination of the Parties’ market shares  amounts  only to [0-5]% and [0 -5]%, 
respectively. Post-Transaction, the merged entity  would thus have limited  market 
power to leverage its position in any of the relevant markets  to force customers to 
buy products in another market . 
(211)  Second , the Parties target different customer groups.  As shown in Figure 13, AMS’ 
main customers are [ information about the Parties’ business strategy ] whilst 
OSRAM’s main customers are [ information about the Parties’ business strategy ]. 
Therefore, even if, as one market participant indicated , ‘[LEDs, laser diodes, 
couplers, light sensors and image sensors] often are sold to the same customers in 
bundled deals so that commercial strength in one product area can be lever aged to 
help the commercial prospects of other product lines ’,132 the customers for the 
Parties’ products are largely different . It is thus unlikely that the Transaction serves 
the merged entity to use any bundling or other foreclosure strategy with OSRAM’s 
                                                 
129  Non-Horizontal Merger Guidelines, paragraph 91.  
130  Non-Horizontal Merger Guidelines, paragraph 93.  
131  Replies to questionnaire Q3 –  Competitors, question 9.2 .  
132  Replies to questionnaire Q3 – Competitors, question 9.2 . In this respe ct, the Notifying Party submits 
[information about the Parties’ market perception ]. 
 
 
41 ([information about the Parties’ customer groups ]) customers or  AMS’ ([ information 
about the Parties’ customer groups ]) customers , thanks to the addition of the other 
party’s portfolio that targets a different application/customer group.  
Figure 13 […]133 
[…] 
Source: Form CO, Annex_10_Sec 5.4_Appendix 014_ID_LL_0020, slide 6.  
(212)  Third , as explained in Section 7.2.5, the market investigation has revealed that 
customers of optical semiconductors hold appreciable market power  and in case of a 
re-negotiation of prices in the course of a supply contract durat ion, prices are likely 
to be decreased for the overlapping products of the Parties.  
(213)  In conclusion, based on all  information available and the outcome of the market 
investigation, the Commission concludes that the Transaction does not raise serious 
doubts as to its compatibility with the internal market in relation to possible 
conglomerate effects.  
8. CONCLUSION  
(214)  For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal  market and with the 
EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement .  
For the Commission 
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice -President  
                                                 
133  [Information from internal document ].