By Al Uszynski, Editor, Inside Lighting
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In a matter-of-fact Q1 earnings call on Friday morning, outgoing Signify CEO Eric Rondolat outlined how the company is quietly unwinding parts of its China exposure one supply shift, price tweak, and inventory buffer at a time. He offered a measured but revealing look at how the world’s largest lighting company is adapting its sourcing, pricing and inventory approaches in response to rising tariffs.
The focus is well placed. The United States is Signify’s largest and most resilient market, accounting for roughly 34% of global revenue in 2024—up slightly from 33% the year prior.
“We have built sufficient inventory in the U.S. to cover our exposure in Q2,” Rondolat said early in the call, “and have stopped all further imports from China to the U.S.” It was a notable disclosure from a company long intertwined with Chinese manufacturing — from consumer lamps to commercial fixtures.
Rondolat further explained, “Our global production and sourcing footprint is allowing us to quickly ramp up our sourcing from geographies other than China, which will be fully in place in the second half of the year.”
Later that day at the company’s Annual General Meeting, newly appointed interim CEO Željko Kosanović reinforced the company’s tariff mitigation strategy, providing additional detail about sourcing shifts, pricing actions and U.S. market resilience.
Global Sourcing Adjustments in Motion
That move is part of a broader shift in supply chain strategy designed to create flexibility and reduce exposure to policy swings. “We are basically carrying many activities with suppliers and our own manufacturing plants in order to be able to move the production that is China-dependent — whether finished products or components — to other countries,” he explained.
When pressed on where that production might shift, Rondolat was measured: “The countries we are targeting at this point in time are mainly countries of Asia.”
Notably, Rondolat’s broad mention of “Asia” came just weeks after Signify announced a 50-50 joint venture with India’s Dixon Technologies — a move publicly framed as a play for local market share, but one that also quietly expands the company’s manufacturing flexibility in a region poised to absorb China-dependent production.
One example: certain HALO downlight models sold by Cooper Lighting are being sourced from Thailand-based facilities rather than mainland China, a detail we learned during a visit to the Hong Kong International Lighting Fair last October.
“Today, only about 20% of our U.S. imports are coming from China,” Kosanović said. “We have already diversified the majority of our supply chain footprint.”
Origin Rules and Strategic Advantage
Country-of-origin classifications — which determine how a product is taxed — are increasingly central to companies’ tariff mitigation efforts. “There’s a percentage of local added value that we need to reach in order to define that the content is local,” he noted.
Rondolat also suggested that Signify’s diversified sourcing model could provide an edge over rivals. “We think that [our sourcing] profile is much better than other competitors that are more dependent on China,” he said. “We believe that our footprint is advantageous compared to others,” he added, “and we could potentially… take some share.”
That “footprint” still includes a significant presence in China. In 2023, the company opened a 2.1 million square-foot LED manufacturing facility in Jiangxi Province — its largest anywhere in the world — bringing the total number of Signify-operated factories in China to ten at the time. The plant was described as a key pillar of growth for both the Chinese and global markets.
U.S. Price Increases and Competitive Positioning
That agility also shows up in how Signify is approaching pricing in the U.S. market, where tariff-related cost increases are starting to filter through. “We have started to increase price in the U.S., and we have communicated that to the market,” Rondolat confirmed.
That pressure, however, isn’t evenly distributed. “We’ve seen heightened intensity when it comes to price on the OEM business,” he said. “But it’s very specific with a very specific technology. It’s not been the case throughout the rest of the portfolio.”
Kosanović noted that some of the company’s U.S. price adjustments had already been implemented in March and April, and that the next phase would depend on how competitors respond.
More broadly, Rondolat explained how Signify calibrates pricing based on competitive dynamics and demand sensitivity. “Pricing is a factor of two things: First, where is competition — in order to stay competitive — and making sure that we have a price which is on the market, below the threshold above which there are strong impacts on demand.”
Inventory Planning and Future-Proofing
If tariffs were to reverse course or soften, Signify isn’t planning to stockpile. “That’s not what we plan. That’s not what we have simulated at this point in time… It’s not about building inventory at this stage,” he said. “It’s about making sure that we are extremely flexible to adapt to whatever we’re going to have to face in the future.”
That emphasis on adaptability is central to the company’s approach. “We’re just trying to adapt having a very flexible supply chain,” he added. “I think that’s the name of the game. And we can do it because we have a global footprint and we have manufacturing plants and suppliers all over the world. And that’s what we’re trying to do at this point in time.”
Incremental Shifts, Strategic Discipline
There were no sweeping declarations, no promises of transformation. Just a steady accounting of incremental shifts: inventory in place, imports paused, sourcing diversified. Rondolat didn’t present flexibility as a triumph, but as a necessity—the quiet math of staying viable in a volatile landscape. “That’s the name of the game,” he said. In an industry where global supply chains can be upended overnight, that kind of pragmatism may prove more valuable than any headline-grabbing pivot.
Kosanović emphasized that the actions taken will allow Signify to meet its topline and profitability targets for 2025 — a sign that the company aims to steer through volatility with calculated discipline.
Tagged with Inside Lighting, Signify, tariffs