12 March 2010


Taiwan’s Epistar entering mainland China LED manufacturing

LED epiwafer- and chip-maker Epistar Corp is teaming with fellow Taiwan-based firms Lite-On Technology Corp (which packages LEDs) and silicon wafer foundry United Microelectronics Corp (UMC, which has a 15% stake in Epistar) to enter into the mainland China LED market, according to SinoCast Daily Business Beat.

Epistar and Lite-On, together with a home appliance maker from the mainland, are to jointly set up an LED manufacturing plant in Changzhou City, Jiangsu Province with a total investment of US$120m (TWD3.84bn). Epistar will invest US$60–70m (TWD2.24bn) and take a stake of more than 50%. In the future, LED epiwafers and chips produced by Epistar will be packaged by Lite-On and delivered to LED TV makers in the mainland.

A spokesperson from Epistar said that Lite-On and Everlight Electronics Co Ltd previously purchased LED chips from it for packaging after obtaining orders from mobile phone makers.

Meanwhile, Epistar and UMC plan to build a joint 50:50 LED epiwafer plant in China’s Shandong Province. Epistar will produce epiwafers while UMC will focus on downstream R&D on applications. The plant’s R&D team will come from Epistar.

The first phase of the plant has a registered capital of US$16m (TWD510m), half from Epistar, which says that it currently has plenty of cash in hand since it initiated a share placement in 2009. In less than half a year, Epistar has since invested in LED chip-maker Tekcore and Nan Ya Photonics Inc (NPI), an affiliate of the Formosa Plastics Group (FPG) specializing in high-brightness LED wafers and chips, together with joint investors including UMC and FPG.

SinoCast says that, because government regulators in mainland China are actively promoting energy saving and emissions reduction, in the future they will speed up the replacement of traditional lamps by LED-based lamps. Epistar aims to attract more local LED TV and lighting customers and obtain subsidies through setting up plants in the region.

Unlike other Taiwanese firms, Epistar still focuses on upstream epiwafer and chip manufacturing rather than pursuing vertical integration covering upstream, midstream and downstream fields. However, the firm has in the past said that it aimed to achieve a similar impact through cooperation with major partners.

SinoCast says that UMC’s affiliated LED street-lamp maker Power Light Technology Co Ltd has previously built a plant in Shandong Province, and that, in its expansion into the LED field, UMC has overtaken rival Taiwan Semiconductor Manufacturing Co Ltd (TSMC, the world’s biggest silicon wafer foundry).

See related items:

LED chip-makers Epistar, Formosa and Genesis report strong year on year revenue growth

Taiwanese LED makers set up plants in China

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