Penguin Solutions to Sell Cree LED to Private Equity Firm

Estimated reading time: 2 minutes

Penguin Solutions announced on November 4 that it had entered into a definitive agreement to sell its Cree LED business to private equity firm Transom Capital Group (Transom).

Cree LED has long played an important role in the industry as one of the pioneers in bringing LED technology into general lighting applications. TrendForce believes the change in ownership could allow the company to sharpen its focus on its core LED business, with future product strategies likely to emphasize luminous efficacy, cost competitiveness, and comprehensive lighting solutions. The company is also expected to pursue higher-value niche markets, including horticultural lighting.

Transom, meanwhile, brings extensive experience in corporate carve-outs and operational integration under complex circumstances. However, its approach to integrating Cree LED, along with its future pricing strategies and long-term R&D plans, remains to be seen.

The transaction will be conducted entirely in cash, although the purchase price has not been disclosed. Subject to customary closing conditions, the deal is expected to be completed in 1Q27. TrendForce notes that Cree LED will emerge as an independently operated LED component company, marking another change in ownership following its earlier sale by Cree, Inc. (now Wolfspeed) to SMART Global Holdings (now Penguin Solutions).

TrendForce's “2026 Global LED Lighting Market Trends – Database and Vendor Strategies – 2H26” report highlights that Cree LED holds a significant position in the global lighting LED market. The company generated nearly US$200 million in lighting LED revenue in 2025, capturing approximately 5% of the market and climbing to fifth place worldwide. With Samsung LED exiting the market, Cree LED is well positioned to expand its market share further.

TrendForce highlights Cree LED as one of the few manufacturers in the general lighting LED sector with a comprehensive patent portfolio. Its core business centers on high-efficiency LED chips and high-performance LED components, serving applications ranging from mid- and high-power general lighting to portable lighting, horticultural lighting, and specialty lighting.

In recent years, Cree LED has refined its product portfolio, broadening its presence across the lighting market while exploring opportunities in applications such as outdoor displays. Lighting applications accounted for 81% of its revenue in the first three quarters of 2026, underscoring their importance as the company’s primary revenue driver.

These efforts to optimize its product mix and improve cost efficiency have helped Cree LED achieve positive cash flow and steadily strengthen its operating margins, establishing a firmer financial foundation ahead of the sale.

Another noteworthy development came in August 2026, when private equity firm Gallant Capital provided financial backing to Lumileds. With private equity firms stepping into both Cree LED and Lumileds, the evolving ownership structures and business strategies of major international LED component manufacturers are drawing increasing industry attention. Their next steps are expected to have a lasting influence on the competitive dynamics of the global lighting LED supply chain.