By Lu Haoting (China Daily)
Updated: 2007-10-08 15:24

Acquiring innovation

Xiao Zhiguo has a story similar to Goodbaby's. Innovation was also at the root of the origin of his company, Dalian Luming Science & Technology Group Co Ltd. But Xiao was not satisfied with seeking innovation only in his own lab. The 45-year-old business leader realized a second leap forward in his entrepreneurial venture lay in acquiring technologies from abroad.

Luming invented the world's first rare earth photo luminescent materials in 1992 and now owns more than 60 patents. The materials are able to illuminate for 12 hours continuously after absorbing light for only 10-20 minutes. The company's website shows the products are used in the Pentagon, Frankfurt Airport, airplanes, Tiananmen Square in Beijing and the Oriental Pearl TV Tower in Shanghai.

But that's just a part of Xiao's business.

His company, based in Northeast China's Liaoning Province, is also a leading semiconductor lighting company in the world. That feat was achieved through an acquisition in 2003.

"The acquisition saved at least 10 years of Luming's research and development process in semiconductor lighting," Xiao says.

AXT Inc, a US manufacturer of compound semiconductor substrates, planned to sell its unprofitable optoelectronics production line in 2003. Xiao saw this as a great opportunity as the unit AXT would hive off was among the world's best in terms of technology and owned over 30 international patents.

With almost all the money he earned in the 11 years prior to that, Xiao bought the business in 2003. He thus became the first high-quality LED (light-emitting diode) wafer and chip manufacturer in China.

The acquisition proved worthwhile. Luming currently owns more than 40 patents in semiconductor lighting.

Last year Luming became the only Chinese LED screen supplier to the FIFA World Cup in Germany, installing 10 LED screens at major football venues.

Luming's products will also serve the 2008 Beijing Games. The company won the bid in July to install the 2,000-square-meter LED screen at the Water Cube. That's the prize for getting the big picture.

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